What does a stockbroker do? If an investor or trader wants to buy or sell a stock or bond or any other type of security he/she will have to go through a stockbroker or a stockbrokerage firm. You may think that you can avoid these options if you buy or sell securities online; however, this is not the case. Even if you do place your orders online, an investor or trader still has to go through a brokerage firm.
The company or individual records the investor’s details, whether he/she is buying or selling and the routes it electronically to the appropriate market for execution. One the order has been carried out, the broker reports the details back to the investor. For providing this service, the individual broker or brokerage firm earns a commission.
There are many other services offered by a broker like checking the details of the investors account to see if the details are accurate and correct. The broker will make sure that any dividends or interest paid to the investor is correctly credited to the investors or traders account.
Stock brokers can also offer advice to investors and traders. They can advise people on whether they should follow through with an investment or they can advise someone on other investment to get involved with for expanding their existing portfolio.
Some traders think that if someone who is trading options needs a full service brokerage house, they should pass on option trading.
Many professional option traders will suggest that an option trader should make a commitment to do all homework by themselves in order to be a trader of any kind. Remember, a trader typically thinks short term, whereas an investor generally thinks more long term.
If someone is looking to become an options trader, he/she will need to have a method of forecasting the trends of the underlying asset. A trader should to understand what makes a company successful or unsuccessful. He/she should also have a grasp on the industry that they are trading options in.