comparison of online brokerages
Comparison of online brokerages can reveal lots of differences between the companies, including differences in brokerage fees, broker services, quality of the trading platform, and additional services.
It used to be that the online brokerages competed mainly on brokerage fees.
These fees where much lower than on their off line competitors, but the services were mainly of "no-frills" type of deals, with little extras beside the ability to trade at low fees.
The low fees feature is still fundamental to the online brokerages, but the industry has evolved to compete more on other features, including the quality of the trading platform and associated services.
In fact, the amount of services you get with your platform is one thing to consider. Services with the trading platform may include:
- real-time financial news feeds
- real-time charting and analysis
- several options to placing a trade (with some even offering the ability to trade directly on a chart)
- 24 hour technical support
These features used to be associated with the systems of the big trading rooms in investment banks and brokerages, but they are now available to everyone, mostly within the initial package.
Nowadays, there are also wireless options, where you can even trade directly from your wireless-web enabled cellular phone.
Also important is the ability to get research material, such as stock research or economic research.
There are many features you can make the comparisons with. Some pre-made comparisons are available from:
- smartmoney.com/brokers/index.cfm?story=intro (2004 broker survey)
- weissratings.com/News/Broker/20020514broker.htm (Ratings for financial safety and integrity of the brokerages)
- jdpower.com/cc/finance/jdpa_ratings/OnlineInvesting.jsp (2004 Online Trading Investor Satisfaction Study)
- jdpa.com/studies_jdpower/pressrelease3.asp?ID=2004103 (Press Release of the JDPA 2004 study)
- keynote.com/solutions/performance_indices/broker_index/broker_trading.html (Keynote Web Broker Trading Index, updated weekly)
Comparison of Online Brokerages - Available Brokerages
To start comparing the available brokerages on your own, you require lists of available brokers.
These are commonly listed in online directories, with short descriptions that get you on your way of comparing the companies.
Directory resources that list online brokers include:
Helping you in your research are several online investing related chats and forums, as well as online groups at groups.yahoo.com and groups.msn.com.
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