1. Brokers and Online Trading: Introduction
  2. Brokers and Online Trading: What Does A Broker Do?
  3. Brokers and Online Trading: The Costs
  4. Brokers and Online Trading: Full Service Or Discount?
  5. Brokers and Online Trading: Choosing A Broker
  6. Brokers and Online Trading: Accounts And Orders
  7. Brokers and Online Trading: Conclusion


One of the most important investment decisions you will make has nothing to do with which stock, bond or mutual fund you buy. We're talking about selecting a broker. Hopefully the information in this tutorial will assist you in your search.

Let's recap:

  • Brokers are the people who handle customer orders to buy and sell securities.
  • Don't forget that a broker is a salesperson.
  • Minimum balances required to open an account range from thousands of dollars to nothing at all.
  • All brokerages charge commissions to execute orders. This fee varies widely depending on the type of brokerage.
  • Look out for hidden fees for transactions like the transfer of assets or inactivity.
  • Full-service brokers offer much more, but they're expensive.
  • Discount brokers don't offer the extras, but they're affordable.
  • Online brokerages have changed the industry by lowering costs and blurring the line between discount and full-service.
  • The type of brokerage you require depends on your investing style.
  • It's possible to check the background of all brokers and firms.
  • The type of account you need depends on the type of securities you want to hold.
  • There are many ways to execute an equity order.

Related Articles
  1. Investing

    Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced commission compared to a full-service broker, but provides no investment advice.
  2. Investing

    Why Use a Discount Broker?

    A discount broker is a stockbroker that does not offer clients investment advice, but trades shares for a smaller commission than a full-service broker.
  3. Financial Advisor

    How Brokerage Fees Work

    What you need to know about fees when choosing between a full service and discount broker.
  4. Trading

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  5. Financial Advisor

    Evaluating Your Stock Broker

    Make sure you're getting the best service by staying informed and involved.
  6. Investing

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  7. Financial Advisor

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  8. Investing

    The 4 Ways To Buy And Sell Securities

    Know the four main avenues of buying and selling investment instruments.
  9. Investing

    Uncovering Hidden Broker Fees

    Even discount brokers can hit you with some fees that seem unnecessary; here are some to watch out for.
  10. Investing

    Full-Service Brokerage Or DIY?

    Determine what you are getting for your fees and commissions and how to get your money's worth.
Frequently Asked Questions
  1. Can I fund a Traditional IRA, a 403(b) or a Roth IRA using pension money?

    Can pension money be used to fund other retirement accounts?
  2. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ...
  3. How does a company move from an OTC market to a major exchange?

    The over-the-counter market is not an actual exchange like the NYSE or Nasdaq. Instead, it is a network of companies that ...
  4. Can I roll a traditional IRA into a 529 college account for my grandchild?

    The short answer: Not without paying taxes. But as with much of the tax code, there are various nuisances and exemptions ...
Trading Center