Compare Broker Costs and Price Execution

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A brokerage firm online trading brokerage charges comparison synonym, or simply brokerageis a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller. Brokerage firms serve a clientele of investors who trade public stocks and other securities, usually through the firm's agent stockbrokers. The staff of this type of brokerage firm is entrusted with the responsibility of researching the markets to provide appropriate recommendations, and in doing so they direct the actions of pension fund managers and portfolio managers alike.

These firms also offer margin loans for certain approved clients to purchase investments on creditsubject to agreed terms and conditions. Traditional brokerage firms have also become a source of up-to-date live stock prices and quotes.

A discount broker or an online broker is a firm that charges a relatively small commission by having its clients perform trades via automated, computerized trading platforms rather than by having an actual stockbroker assist with the trade.

Most traditional brokerage firms online trading brokerage charges comparison synonym discount options and compete heavily for client volume due to a shift towards this method of online trading brokerage charges comparison synonym.

Other ways to lower costs for these brokers is by executing orders only a few times a day by aggregating orders from a large number of small investors into one or more block trades which are made at certain specific times during the day.

They help lower costs in two ways:. Since investor money is pooled before stocks are bought or sold, it enables investors to contribute small amounts of cash with which fractional shares of specific stocks can be purchased. This is usually not possible with a regular stockbroker. Many broker-dealers also serve primarily as distributors for mutual fund shares.

These broker-dealers may be compensated in numerous ways and, like all broker-dealers in the United States, are subject to compliance with requirements of the US Securities and Exchange Commission and one or more self-regulatory organizationssuch as the Financial Industry Regulatory Authority FINRA. The forms of compensation may be sales loads from investors, or Rule 12b-1 fees or servicing fees paid by the mutual funds.

From Wikipedia, the free encyclopedia. Comparison of online brokerages in the United States. Retrieved 10 October British Columbia Securities Commission. Thomas Smith 6 March Regulation of Investment Companies.

Lexis Nexis Matthew Bender. Retrieved from " https: Brokerage firms Financial services. Views Read Edit View history. This page was last online trading brokerage charges comparison synonym on 8 Februaryat By using this site, you agree to the Terms of Use and Privacy Policy.

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Before you understand what a spread is you should first of all understand that in the foreign exchange market prices are represented as currency pairs or exchange rate quotation where the relative value of one currency unit is denominated in the units of another currency. An exchange rate, applied to a customer willing to purchase a quote currency is called BID.

It is the highest price that a currency pair will be bought. And a price of quote currency selling is called ASK. It represents brokerage service costs and replaces transactions fees. Spread is traditionally denoted in pips — a percentage in point, meaning fourth decimal place in currency quotation. Following types of spreads are used in Forex Trading. Fixed spreads are set by dealing companies for automatically traded accounts. Fixed spread with an extension — certain part of a spread is predetermined and another part may be adjusted by a dealer according to market.

Variable spread — fluctuates in correlation with market conditions. Generally variable spread is low during times of market inactivity approximately pips , but during volatile market can actually widen to as much as pips. This type of spread is closer to real market but brings higher uncertainty to trade and makes creation of effective strategy more difficult. Observing variable spread graph trader could define moments when value of the spread reaches its extremes — either maximum or minimum.

On the moment of minimal spread between 0 to 1 pips he or she can open simultaneously buy and sell positions and later close both of them on the moment of maximal spread.

As a result profit will equal to maximal spread value. This trading strategy under variable spread conditions has an advantages of low risks involved, because profit probability does not depends in this case on actual currency pair quotation but only on spread value. More over if the trading position is open during minimal spread it guarantees breakeven result and makes profit earning highly possible.

There are several factors that influence the size of the bid-offer spread. The most important is currency liquidity. Popular currency pairs are traded with lowest spreads while rare pairs raise dozen pips spread. Next factor is amount of a deal. Middle size spot deals are executed on quotations with standard tight spreads; extreme deals — both too small and too big — are quoted with broader spreads due to risks involved.

On volatile market bid-offer spreads are wider than during quiet market conditions. Status of a customer also impact spread as large scale traders or premium clients enjoy personal discounts. Nowadays Forex market characterizes high competition and as brokers are trying to stay closer to customers, spreads tends to be fixed on lowest possible level.

Each trader should pay sufficient attention to spread management. Maximum performance can only be achieved when maximum quantity of market conditions is taken into account. Successful trading strategy is based on effective evaluation of market indicators and specific financial conditions of a deal.

Because spreads are subject to change, spread management strategy should also be flexible enough to adjust to market movement. As a newcomer to the Forex market, there are several terms used that you may require a definition for. Both these terms are also a very important attribute of the Forex market as both represent the value of a currency pair to the trader and the broker.

In the Forex market, the value of a currency is presented in pips. A pip is a number value; the majority of currencies are priced to four numbers after the decimal point. This page is part of archived content and may be outdated. What Influences the Spread in Forex Trading? Forex Pips and Spreads As a newcomer to the Forex market, there are several terms used that you may require a definition for. Pip Definition In the Forex market, the value of a currency is presented in pips.