The main benefit of a discount broker is that they provide unbiased services. As they are not going to provide you with any advice they are not going to help you buy or sell stocks. The discount brokers are an answer to the high costs plaguing the financial sector. They can be compared to as a low cost airline. Just they are going to provide you with a platform to execute transactions. Pretty much on the same lines that a low cost airline is going to make your reach your destination safely. The rock bottom brokerage rates make a lot of difference to the clients. Stock or research calls are available on the internet. Many newsletters even go on to provide trading advice. All of them are undertaken at a fixed fee.
The main difference between a regular and the top discount brokers India is in terms of the commission fees. They are certain brokerage houses they go on to charge a fixed rate if the value of the stocks are below a certain point. When it is options trading, the brokerage houses have a flat rate per contract. In calculating brokerage rates by this method this goes on to have a major impact on the profitability of a client.
Once again the major benefit of a discount broker is that they are unbiased. As no form of advice is provided they are not going to help you purchase or even sell a stock. No form of research or trading calls will be made to you or brushing any recommendations they made under the carpet.
The stock market in India has undergone a major transformation in the last few years. Online trading has gone on to provide a level of transparency and at the same time brought down the cost of trading. The level of transparency and cost parameters has been brought to a new level. In addition a new set of stock brokers have emerged who go on to levy rock bottom rates of commission on their transactions. In industry parlance they are referred to as discount brokers.
The broker is going to levy a charge as they offer a platform for you to transact. With traditional brokers the charges are expected to be high as they provide you with information about when and where to stay. A simple logic is if a client makes money then only a broker can make money. The broker has varied rates of commission depending upon the quantum and volume of trading.
Before you jump the gun on planning to open an account with a discount broker check out whether they are any hidden costs involved. Keep a check on the infrastructure of the discount broker and there is a standby mechanism if the internet connectivity is hampered in any way.
For any form of transaction, be it commodities or securities various costs are involved. There are statutory costs involved and more brokerage higher costs will accrue