V. 19:7 (78-85): Traders’ Resource: Brokerages

Traders’ Resource: Brokerages

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 interest.

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 first generation 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.