Online broker is a broker which considered that interfaces with customers online on the Internet instead of meet each other or even face-to-face. Also because of the high costs of bricks-and-mortar brokers, online brokers offer lower fees.
first we have to know a brief history about online broker. Before the invention of the internet, the investors had to place their orders by a stockbroker, person, or via the telephone. Then The brokerage firm enter the order into their system.
Till 1985, America Online and CompuServe hosted Trad-Plus, a retail trading platform. E-Trade Securities was created by William Porter, one of Trade-Plus’ founders.
Choosing the best online broker
So the most important questions is, among a huge number of online brokers, how to choose the proper one?..
To decide the suitable online broker you should look at the following factors:
when you make an account in online broker, you will have to bay fees in exchange of using it. Although you have to be very careful avoid account fees completely, or minimize them. So the most of the online broker charge a fee for transferring out funds, so when you don’t pay the fees, your account will be closed. But the Common fees to watch out for those who include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.
trading style and tech needs
If you are a beginner investor, you will not be in need to extras, like an advanced trading platform. Although you will be in need to an education and a little hand-holding. That will be provided videos and tutorials on the broker’s website, or in-person seminars at branches.
If you are an active traders you should look for a brokerage that supports that kind of frequency. That will be provided weighing a broker’s trading platforms, analysis tools, research and data offerings.