Introduction
Summary: Looking for a discount broker for your IPO investments, futures and options? Here’s how to choose one.
Like Gandiv goes a long way in the victory of Arjuna, your success in the stock market is highly dependent on the stockbroker you choose.
So who exactly are stockbrokers? They are essentially authorised intermediaries who’ll facilitate your trading activities against some fees.
Types Of Brokers In Stock Market
You’re going to find various types of brokers in the market. Before you get down to business, it’s essential to know the types of brokers and how they function:
Full-service Brokers
They are the big brothers who offer end-to-end advice on investment in stocks.
They deliver the entire gamut of services you may require as an investor in the share market.
Discount Broker
They only buy and sell shares on your behalf.
They are running the show these days and all brokers are slowly converting into a discount broker or starting a discount broking arm.
Direct Access Broker
They are new kids on the block. They offer state-of-the-art technology-driven share trading services.
Some discount brokers can give you an edge in different segments like futures and options, equity, etc., with the financial and product offerings they have.
Before you set out to choose a broker, it’s always a good idea to check exactly where your broker’s expertise lies.
How Do You Choose the Right Discount Broker for IPO, Futures and Options, and Stock Trading?
Choosing the right discount broker who suits your requirements is not easy. The market is full of options, and all of them have their own USPs.
However, here are some crucial pointers that can help you choose a broker who’s just right for you.
Customer Support
One of the primary services to look for is the availability of 24X7 call support or else be ready to be stuck with the IVR for hours.
In an industry where seconds difference matters to customers, you need to have an assurance of personal support available at a call distance.
Technology Enabled Service
Check for brokers with hi-tech web and mobile apps. Ideally, the apps should have features like options chain, MTF, multiple watchlists, advanced charts, basket order etc.
Whether you use these features currently or not, you’ll need them at some point of time and then switching brokers will be difficult.
Least client’s disputes with SEBI
Look for brokers with a spotless history of client’s disputes with SEBI.
Ideally, the number of disputes should be as few as possible.
This is an indication of the tech and system failure of discount brokers.
Brokers With Robust Systems
Choose brokers who have sound systems in place to save you against Black Swan events, i.e., brokers who didn’t incur losses when crude oil prices plummeted to negative levels (Rupeezy is one of them).
This indicates that your money is in safe hands, thanks to the well-integrated systems in place.
Commission Charges
Ideally, you should choose a broker whose commission structure is transparent with no hidden costs.
You need to remember that you are investing your hard-earned money in a volatile investment tool to grow your wealth faster than a traditional investment option.
Therefore, make sure you check the services offered by a discount broker before you start dealing with them.