Most stock exchanges require that any buying or selling of company stocks take place through a brokerage house. When you need to carry out a trade, your broker will send out an order to the floor of the securities exchange. After the trade is executed, the broker will transfer the title of the stock to you after clearing and settling the trade.
Stockbrokers License
Most brokers require a license to practise. Depending on the stock exchange, the stockbroker may be required to sit and pass a licensing exam. For example in the UK, you may be required to undergo various FSA Registered Persons Examinations.
Professional Stock Trading Advice
Other than executing your trades, most new stock traders will need the assistance of a stockbroker to learn more about the stock market.
You can use the broker to advice you on the best stock investments depending on your trading profile. Of course, you are the final decision maker but there is nothing wrong in seeking professional help.
Stock Research
If you do not have the wherewithal to pick your own stocks, you can seek the advice of Full Service Brokers. These brokers will carry out all the research on a given stock for you.
Some of them will do all the trading on your behalf of your account. All you do is give them instructions on your needs and they research, execute the trades and manage your stock portfolio. Of course, such a service comes with a fee and few individuals are able to afford such services.
Discount Brokers
Improved trading technology has given rise to discount brokers. These brokers will only give you the opportunity to make your stock trades. Most of these use online trading platforms where you can execute your trades at the touch of a button.
This means that you have to do the stock research on your own. Their fees are relatively cheap compared to Full service brokers.
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