Stock market has always been popular among the investors and traders because of the vastness of the options it offers. It’s a platform where trade happens amounting to billions of rupees. The advantage of working with shares is that if you are a smart player, you can end up adding money to your kitty. But, the idea of investing wisely is not as easy as it seems.
When the stock market opens, there are thousands of people eyeing the market. Any deviation can cause huge loses or profit depending upon which share is invested where. At this hour you need professionals in the market who have the knowledge and who can do the work for you. These professionals in the financial market are called financial analyst. These financial analysts analyse your requirement and based on the amount of the capital you are investing, they decide on to the shares which can reap maximum benefit for you. In turn they charge money from you. In simple terms, we call this brokerage.
Most of the frequent traders who invest on a daily basis end up giving huge sum of brokerage charges. High brokerage fees and rising number of investors have paved way for the development of firms who charge minimum amount of brokerage in turn of the services provided by them. Lowest brokerage fees help in adding onto the profits earned rather than shelling it out to the analysts. With the development of internet accessibility to all, opting for discount brokerage is becoming a popular phenomenon. Discount brokers are a one stop solution to all your needs – best investment selection, optimum tools over the best of platforms.
The chances of disappointments, if you are opting for the discount brokerage are less. The main agenda of these firms is to gain maximum benefits from the market. Hence they come up with extensive research post which they guide the investors about which stocks to invest in or which stock will perform better in the stock exchange market. The first step to begin is to open a demat account. It is an account where your shares are stored in an electronic form. Both banks and brokerage firms provide demat account services. By analysing the pros and cons of both the institutions, you can decide which one is best for you.
Banks provide demat account services along with the savings account facility. Whenever you execute a purchase order in the stock market, your demat account gets credited and the savings account gets debited. In the similar fashion, when a sell order is executed, the demat account gets debited while the saving account gets credited. The charges for opening demat account with the banks are comparatively higher. On the contrary brokerage firms provide additional facilities at much lower cost.
The fundamentals of sell and purchase work same as in case of a bank’s demat account. The only difference lies in the fact that the brokerage firms are tied up with banks to route the customer’s money in to the account of the brokerage firm’s account first. Not only this, the recommendation about the stock market is also provided to the customers who opt for the brokerage firm services.