The stock broker is probably the most important player on the floor when it comes to buying and selling stock. This is the guy that actually gets up early in the morning to study the stock market trends on TV and the computer and in the newspaper. He’s the guy that puts on the suit and tie and goes to battle for his clients, conducting the actual transactions required to buy and sell stocks on the stock market.
What It Takes To Be A Stock Market Broker & Professional Trader
In order to be a stock broker, the brokerage firm and individual brokers have to undergo rigorous training, background checks and take a licensure test administered by the SEC or Securities and Exchange Commission. These are the guys that oversee all of the functions associated with the stock market. If you may recall, it was the SEC that got involved when AIG almost came tumbling down a few years back. They were involved with exposing Enron and MCI for the frauds they were. The SEC is the stock market police.
Okay, so back to the stock market brokers. You can think of these guys as the real estate agents of the financial world, the caddies of the stock market. These guys are an investor’s best friend and their only ticket into the fast paced world of the stock exchange. We as individual investors cannot initiate any buy or sell transactions on our own. We must act through a broker. They buy when their clients say buy and sell when their clients say sell. They provide sound advice buy and sell advice to their clients based on years of research and market trend analysis.
Stock brokers don’t offer their services for free. Not by a long shot. Each order carried out on a client’s behalf earns that broker a commission, regardless of the profit or loss to the client. In the case of traditional brokerage houses, the amount of commission is based on the number of stocks that are bought and sold or a percentage of the overall transaction. But, there has been an increase in the emergence of so-called “discount” brokers. These guys offer to carry out the exact same services for much less…usually a flat fee. Many discount brokerages are online services and are a fantastic resource for small time investors due to their lower transaction price, wealth of knowledge and tools they provide to their clients and the ability of the client to maintain a lower balance in his or her brokerage account.
The main drawback to using an online brokerage service is the lack of personalized financial advice that you, as a client, will receive as compared to a traditional brokerage. Although more expensive, a traditional brokerage may be the way to go if you are looking for financial advice and stock trading tips in addition to facilitating your buy and sell orders.
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Good post. I have to take a look at the broker links: I’m off to check it out