How to choose online stock trading companies

A trader/investor needs his broking firm to provide him peace of mind, security and low rates. But choosing where to buy stocks is not easy. Many online share dealing companies out there seems reputed, and all set to welcome investors with tempting offers. So, how should a trader choose his online stock broker? Should he grab the best-looking offer or should he research before signing up. Well, he should research and here are the factors which he must research on before trading stocks online:

How to choose an online stock broker: Monetary considerations

Brokers follow a two-tiered commission structure. Online trading features lower commissions, while speaking on the phone with a human being and placing orders is subject to higher commissions. Online traders are charged for a small percent fee. Hence, depending on how the investor/trader plans to transact (investing online or offline, or both), he must first compare the commission structure of different firms. What is the minimum initial deposit? Trading in stocks is a risky business and all online brokers require their customers to make an initial deposit to cover potential losses. The deposit can even be as low as £50 and as high as £2,000. Online brokers who take a high deposit charge lower commissions, and vice-versa. The minimum deposit must be maintained. If its balance falls below the minimum stipulated, then the broker will levy a fee. Therefore, while selecting an online broker, read the fine print concerning his minimum deposit and fees. Every online broker equips stock traders/investors with a set of tools to help them in stock trade. Some tools are priced, some are free. These tools can be: - A real time news ticker which streams the latest economic news happening around the world, along with commentary on how this news should impact onto the market. - Real time charts, which display technical data. The trader must interpret the charts to make buying/selling decisions. - Recommendations by experts - International trading - Commodity trading and Futures and Options (typically these trades will be facilitated by the online trading account) So, a trader-investor has to compare the different tools available. If these are priced, then he must compare the prices of tools which he will use.

Non-monetary considerations

Does the online stock broker have local offices? If this is the case, the trader-investor has to pay a visit. Online trading provided by a broker with several physical premises seems more secure than trading provided by a plain vanilla online set-up. For example, Barclays trading provides peace of mind as compared to an unknown outfit. Consumer review websites host authentic and genuine customer reviews. These must be viewed before selecting a broker.