Traders Resource: Brokerages For Traders by Techincal Analysis, Inc.
Self-directed traders, as STOCKS & COMMODITIES
readers usually are, have more
choices than ever in their ongoing search
for speed, pricing efficiency, and good
accounting when it comes to brokerages.
First, you have to find a brokerage
that handles your tradable; full-service
brokerages dealing with equities, options,
futures, bonds, mutual funds, foreign exchange, and
cash goods are usually full-priced as well. A little scouting,
however, will get you a brokerage targeted on your market of
After that, your first question these days might be, “How
fast can I execute an order?” Look for whether the brokerage
offers direct access to automated exchange trading systems,
market makers, and electronic communications networks (ECNs). If not, check to see if there is at least the firstgeneration
electronic trading capability of placing orders
online through the Internet. Absent that, you’re relegated to
old-fashioned phone calls.
With the presence of freely available company information
over the Internet, retail brokerage research is less valuable
than it ever has been. Nevertheless, if you’re in less
intensively studied but highly commercial markets such as
futures, a brokerage’s ability to provide market statistics,
hedging activity reports, and other commercial information
may be critical to your trading and investing decisions.
Finally, don’t forget the security of your money. Inquire
about a brokerage’s clearing operations, and if you’re in equities,
about Securities Investor Protection Corp. (SIPC) coverage.