Surely recently you have read, studied and absorbed various information about investments and the stock market. And finally we decided to open an account in order to try our hand at practice. This means that it is time to choose a broker.
A broker is an intermediary between you and the exchange. With it, you can buy and sell securities, trade currencies and other financial instruments. The broker also deducts income tax for you from your profits from transactions and dividends.
Legal entities and individuals cannot trade on the exchange directly, but only with the help of a broker. He is a professional participant in the securities market. And to get this status, you need to meet certain legal requirements.
How not to be mistaken when choosing your intermediary? Here are the main points that an investor should consider before entering into an agreement with a broker.
Reliability
A broker, like any financial institution, can go bankrupt. Or lose the Central Bank license. To avoid this, refer to the tested
proprietary trading firms. How reliable a broker is, in addition to having all licenses, can be determined using a rating. Ratings are assigned by special organizations - rating agencies. Most importantly, the more A's in the rating, the higher the rating and the more reliable the broker.
Commissions
Each broker offers different rates. Before opening an account, decide which one is best for you. To do this, decide for yourself which markets you plan to trade: stock, derivatives, over-the-counter, or all at once. How often do you want to trade.
Tariffs are most often conventionally divided into those that are more suitable for beginners, those that will be convenient for more experienced and active investors, and those that are intended for very professionals or traders.
There are obligatory payments that a broker charges an investor, regardless of the volume and number of transactions, there are those that directly depend on how you behave in the market. And it happens that some kind of commission is completely absent. But in this case, you should pay attention to the rest of the terms of such a tariff, perhaps the commission for another service has been increased.
Market availability
Explore what financial instruments and markets are available from the broker. Decide what you are mainly going to trade.
Service
In order to trade on the stock market, you need a trading terminal. Almost all major brokers now offer mobile trading applications. Demo access is often used in applications. Download and see how you are satisfied with the interface and whether it is convenient to use the service.
Ask the broker if it is possible to replenish the account with different bank cards and withdraw to any cards. If a bank provides brokerage services, it can limit this function or add a commission.