Hello ! In this article, I will answer the question "What is a Cheap Stock Broker?" When it comes to online trading, one can hardly go a day without seeing an ad on television for online stock brokers advertising that they have the best price and service available for just about any investor out there.
Scottrade, E*Trade, and TDAmeritrade ads all make claims to be a cheap stock broker.
Here I will show you that while these brokers are all priced below $10.00 per trade (if you meet certain minimum requirements), they are not necessarily a cheap stock broker. Any company has huge advertising budgets, a staff of stock brokers, and even local branch offices.
That can translate into more overhead and expenses for the company. More expenses mean more expensive products. All companies have to do something to offset overhead - - so they pass it on to you and me, the consumers.
Since you are reading this, I will presume that you are most likely interested in the original subject of this article: What is a cheap stock broker? More importantly, who are they, and how do I find them? You may not be so interested in who has the most branch offices or who has the most TV ads. While having the ability to go and sit down with the a real-life stockbroker would be nice, it will also have its cost. Of course, that personal, one-on-one interaction comes with a price. I am sure that I don't have to tell you that the cost of that interaction is passed on through a higher commission.
Making a stock purchase with the smallest commission possible is the name of the game. My thought is that a truly cheap stock broker is one that charges $5.00 maximum for each trade. Even better, and what do you know, there are actually a few companies that offer free trades. Now that is what I call a cheap stock broker!
Scottrade, E*Trade, and TDAmeritrade ads all make claims to be a cheap stock broker.
Here I will show you that while these brokers are all priced below $10.00 per trade (if you meet certain minimum requirements), they are not necessarily a cheap stock broker. Any company has huge advertising budgets, a staff of stock brokers, and even local branch offices.
That can translate into more overhead and expenses for the company. More expenses mean more expensive products. All companies have to do something to offset overhead - - so they pass it on to you and me, the consumers.
Since you are reading this, I will presume that you are most likely interested in the original subject of this article: What is a cheap stock broker? More importantly, who are they, and how do I find them? You may not be so interested in who has the most branch offices or who has the most TV ads. While having the ability to go and sit down with the a real-life stockbroker would be nice, it will also have its cost. Of course, that personal, one-on-one interaction comes with a price. I am sure that I don't have to tell you that the cost of that interaction is passed on through a higher commission.
Making a stock purchase with the smallest commission possible is the name of the game. My thought is that a truly cheap stock broker is one that charges $5.00 maximum for each trade. Even better, and what do you know, there are actually a few companies that offer free trades. Now that is what I call a cheap stock broker!
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