Category: Types of stock brokers

Also called a direct access stockbroker, an online stockbroker offers services to active day traders with the smallest commission – usually priced on a per-stock basis. Online stockbrokers offer direct access platforms with capabilities of routing and charting, and access to multiple exchanges, market makers, and electronic communication networks (ECN).

Also, online stockbrokers offer the advantages of access and speed, allowing executions of orders on point-and-click. The platforms also enable the placing of complex options and stock orders. The access to heavy-duty platforms usually comes with a monthly fee consisting of software and exchange fees; however, the software fees can be discounted or waived depending on the actual number of shares traded monthly by the client.

Discount stockbrokers provide financial products, access to mutual funds, banking products, and other services. A discount stockbroker offers many products and services that are similar to a full-service stockbroker, but with smaller commissions.

Hence, swing traders and day traders who are more active may find discount stockbrokers appealing. Moreover, the platforms serve active day traders and investors; hence, they provide more research tools and trading options than full-service platforms.

A full-service stockbroker offers a variety of financial services to clients. Usually, clients are assigned individual licensed stockbrokers. The brokerage firms employ research departments providing analyst recommendations and access to initial public offerings (IPOs).

Full-service stockbrokers also provide services like financial planning, business and personal home loans, banking services, and asset management. Clients can either contact their personal stockbroker for trading options or use mobile and online platforms.

However, stockbrokers offering trading functions and online access charge higher commissions. Moreover, as the online platforms of full-service stockbrokers usually cater to long-term investors, the platforms provide fewer indicators and tools for day trading investors.