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Discount Online Broker - Finding a discount online broker

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Making stock trades is much easier in today’s world than almost ever before. Instead of having to use an expensive and unreliable human broker, individuals today can save money and time by using a discount online broker. The nice thing is that plenty of these exist, so you should have absolutely no problem finding one to do the trick. Not all discount online brokers are created equally though. Some have lower prices and provide less in the way of research. Others give their customers a ton of value for the money, while still keeping prices low. Some online brokers have low up-front trade prices, but charge unnecessary fees. It is important to know what you are getting from a discount online broker before you sign on.

Automatic trading programs
When looking for a discount online broker, the first thing to look for is the existence of cheap automatic trading programs. Though most people just know about the instant, real time trades that are possible using online brokers, few talk about this cost-effective alternative. Sharebuilder.com is one discount online broker that gives individuals the ability to make trades once every week for free. These trades are typically large buys that are executed at the beginning of the week and they are not subject to the costs of real-time trading. For those who want to keep costs down or don’t have a lot of money to invest, this is a great way to get started.

Lowest real-time trade prices
When shopping for a discount online broker, you should also be on the lookout for low real-time trade commissions. These companies make their money by charging you every time you want to make a trade. They differentiate themselves by offering different prices for these trades. Even if you don’t see yourself making tons of trades on a daily basis, it is still important to get a low price. You never know when your own investment goals might change or when you will have more capital to invest in the stock market.

Most companies will range between $5 and $10, with the best discount online broker coming in at $4.95 per real-time trade. KingTrade is the company that offers this low rate, but there are competitors that are in the same range. AmeriTrade, for instance, charges $5 for stock and EFT trades on a daily basis. Scottrade has bumped its prices up to $7 per trade in the last year.

Minimum opening balances
Though AmeriTrade might seem like a great deal at $5 per trade, you might also look at the requirements to get such a deal. They require a $5,000 initial investment to get started. For people who are just looking to learn a little bit and don’t have that type of capital, this is a prohibitive factor. The key is finding a discount online broker that provides the best combination of price and capital requirement. There are places online today that have low or non-existent deposit requirements. Sharebuilder.com, for instance, requires a minimum $100 deposit to get going.

Analytical services
When looking for a discount online broker, you must consider what they bring to the table in terms of analysis. It can be hard to make informed stock trades if you don’t have information at your disposal. Typically, discount brokers will be somewhat skimpy with the tools they provide. This is how they cut costs and it’s just something you will have to do deal with. Some will provide charts, articles, advice, and other things to help you make good decisions. Scottrade is one discount online broker that tries to do more for its clients by providing unlimited access to analytical tools.

Free trades
When looking at the discount online broker options, consider the number of free trades that they will offer. Some will do this as an introductory bonus, allowing customers to have 10, 20, or even 100 free trades. Others will provide a dollar amount for individuals to use up in commissions. As you choose the top discount online broker for your needs, be sure to look for the best offers. This will let you get your feet wet while you figure out if that particular broker is for you.

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