Overview Of A Stock Broker

Stock market is a place where companies have listed themselves and have asked for public contribution or an IPO (initial public offering). Through this, the companies take the capital from the market and allot a certain percentage of interest in the company capital to the investors. This capital contribution is issued in form of shares or stock options.

If the company does well, the share prices go higher, you can sell your shares and earn more money. That’s not as easy as it sounds. The stock market list thousands of companies, it is difficult to know the trend. The whole income depends upon when to buy a particular stock and when to sell it. You need a veteran to help you and there comes the stock broker.

One needs to clear certain examinations before they are registered as a stock broker with a stock broker’s association. You need the services of a stock broker, if you want professional advice and tips on handling the queries. Such brokers may operate as an employee of a full service brokerage firm or they may act as independent consultants. 

A stock broker creates independent research and advises you on what stocks to buy or sell. An important point here is that the broker will only act in the capacity of the financial advisor; he will not carry out any transactions without your instruction to do so. The ultimate decision is yours. They can only guide you or give you hint on current market trends and forecasted market trends.

These brokers charge you a commission on every sale or purchase of stock. Thus they earn their living through the commission on the commercial transactions in stock market. An average fee or commission per transaction varies from 0.5% to 1.75% depending on the stock that is traded. These brokers help you to buy the stock online or through the direct market. it is a good idea to check references from friends, family members and colleagues before hiring or using a broker for trading.

It is important that you explain them your short term and long term financial goals, along with your budget for trading, you must also inform them about your ability to take risks. Based on the information provided you can these brokers will suggest you the stock trading options.

One need to keep in mind that stock broker is also a human being and not a machine to be accurate with its predictions. You need to take calculated risks before handling the final dealing. Your broker’s job is to find the right stocks for you, the decision to invest or to pass is completely yours and you cannot hold the broker liable for any losses.

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