In the stock market, a financial broker is defined as a legal entity authorized by the Financial Supervisory Authority to negotiate supply and demand and conclude transactions on behalf of the client.
Choosing a financial broker is like choosing a bank to take out a loan or deposit. It is essential to know that if you want to buy or sell shares on the stock exchange, it is necessary to open an account with a licensed financial broker company.
- The broker will assist you in creating a diversified portfolio.
- The broker is always up to date with market events.
- The broker will help you know the risks associated with your trades.
- The broker will offer you the advantages and risks associated with each financial asset.
- If you do not have experience, a financial broker is the best option to start investing.
- If you don’t have time to watch the news, you can contact your broker to stay fully informed.
A financial broker’s set of financial instruments is an important criterion, especially for experienced investors. Basically, in addition to trading activity and account opening services, the services provided include daily market analysis, signals, and advice from experts that the broker offers to help users of the trading platform.
You should know that trading activity involves certain costs. On the one hand, the fees charged by the market and the broker fees are on the other hand. You need to look for an open trading service based on transparency without hidden costs and at a level that does not affect the returns on your investments.
Trading accounts with the financial broker
Licensed brokerage firms such as Axia Investments provide you with several major trading accounts to meet the requirements of every type of investor.
These accounts provide access to financial instruments for trading in the spot market. These accounts assume the total amount of funds required to trade and amounts related to fees and commissions charged by the broker or any fees charged by the markets in which the transactions occur. An investor can choose to open an online trading account, or he can take advantage of the help of a financial broker.
These major trading accounts allow trading derivative products with assets, commodities, stocks, and indices. With these accounts, the investor only needs a percentage of the total transaction value (margin) to profit from the price movements of the relevant underlying asset. Margin requirements may change depending on market volatility and the risks associated with transactions. Margin trading accounts are suitable for investors who are willing to take on additional risks. They make it easy to make higher profits, but at the same time, they can lead to significant losses when the market moves against the investor’s position.
A type of discretionary trading account requires the management of the investor’s financial resources by a broker approved and regulated by the Financial Supervisory Authority for this purpose. The funds will be invested by the financial broker who has experience in the capital market; the account holder receives periodic reports on the activity carried out on the trading account, the status of the available cash, and the used investment strategy.
Before opening an account with a broker
- Know the type of account you need (specify the investment objectives, the income allocated to them, and the potential risks on the investment).
- Compare costs against benefits: standard or negotiable commission, trading platform performance; The seriousness of the broker you choose.
- Choose a broker that gives you access to a wide range of services: technical and fundamental analysis, access to educational webinars as well as a wide range of tools.
- Before choosing a broker, make sure that it is regulated, licensed, and has extensive experience in the market to meet all your requirements.