There are over 3,000 broking outfits in the Indian markets. Be it cash segment, equity derivatives, currency derivatives or debt, brokers play the crucial last-mile role of connecting the investor with the market. Finding the right broker in the stock market is akin to finding the right partner.
While most investors only measure the capability of a broker on brokerage fee, they forget to focus on the broker's tech prowess, user-friendly platforms, research strength and offerings and seamless connectivity with markets. Ultimately your trades will be as good, or as bad, as your broker. Do a little research on the broker before you sign up. Here are a few ideas to help you the best brokers.
In the current times, market is getting increasingly institutionalised and more sophisticated. Individual investors are hampered on information and analysis, unless they have a strong broker by their side. So, the right stock broker for you today not only brings professional service on the table, but gives you databases, analytical muscle, disciplined process and lightning-fast trades in a smart platform that once were the preserve of only deep pocketed-institutions.
Smart trading platforms: Every customer is unique, so customisation is required for your trading experience based on distinctive needs. Technology plays a huge role in building and maintaining the backbone of trading platforms. It also allows you to control costs. Your stock broker should let you choose the platform that suits your trading needs. Given that trading happens all through the day and you might want all possible access, intuitive trading platforms should offer browser-based as well as desktop-based trading access. This enables hassle-free trading across multiple asset classes. Top brokers can offer big data analytics and robo insights for their trading platforms. News analytics, peer comparison, screeners and much more help in executing informed trading decisions. With the advent of smartphones, mobile apps are par for the course for sophisticated derivative trading. The right broker will also offer you branch dealing desks and call & trade facilities so that you can use your relationship manager if you are for some reason not able to execute those important trades.
Research it like Buffett: In the stock market arena, research is your secret weapon. Investment gurus like Warren Buffett boost their trading with research. But that doesn’t mean that a retail investor like you can't get armed to trade like the experts. Good brokers understand that the value of intensive research so that you get the information you want.
Go for a broker that has a demonstrable team of highly experienced analysts. Only a research team with solid experience and strategies can help you navigate the ups and downs. Research will ensure you can maximize profits while keeping your risks to a minimum, irrespective of market volatility. Study the research offerings closely. Good brokerage houses should be able to send you need-to-know investment summaries, pre-market reports, incisive Futures and Options (F&O) c?alls, lucrative options strategies, and proprietary services like model portfolio. Apart from fundamental research, short-term trading opportunities are best exploited with the use of technical analysis. Look at the track-record of the broker's pre-market calls based on technical analysis, intraday trading support with live market calls, and whether they give positional calls when a breakout or breakdown happens.
Finesse and form: Trading time in markets is time-bound. Hence, your broker’s systems should always be ready to execute those winning trades that you have planned. Yet, disruptions in trading activity across exchanges take place.Try and find out about your broker’s systems uptime. If the broker's system doesn't offer 100% uptime to investors, this can be a big put-off. Also, pay close attention to service standards. Find out about account minimums & fees, the flexibility in terms of commissions on the investments you'll use most, promotional offers and ratings and overall customer service. It is quite likely that you would have begun with a large list of brokers but at the end of the search, you will find a few ones left to choose from. If you want to arrive at the best ones, find out about the degree of compliance with stock exchange regulations. Find out about their ethical business standards and strong risk management capabilities. ??Just like the search for a partner, finding the right broker isn't always easy. Now that you have a good understanding of how brokers and brokerages work, forge ahead and decide who the right stock broker for you is.
RESEARCH PAYS
- See the track-record of pre-market calls of the broker based on certain factors
- Find out about account minimums and fees, flexibility in commissions, others
The writer is executive director and CEO, Reliance Securities
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