Why you need a brokerage account?

You need a brokerage account if you want to trade stocks online. In this account you can deposit money for trading. Your brokerage account is where you will be placing your trades as well. But, before opening a brokerage account, must know a little bit about the different types of accounts and how the brokerage companies are paid as well as what will be expected of the investors as to the procedure of opening a trading account. There are mainly three types of accounts for buying and selling securities: 1) cash accounts, 2) option accounts and 3) margin accounts. So, go for the best brokerage account in Bhopal.

1) Cash account is when the investor has to pay for his or her purchase up front. The brokerage needs a big amount of money deposit when the account is first open in order to oversee the purchase in the fastest way.

2) A margin account is when you can take out loans from the brokerage company to buy stocks against his or her existing securities. You must have a cash account to have a margin account and the margin is 50% for stock trading. This means if you have $50,000 in your cash account, then you can buy upto $100,000 of stocks.

3) Except the addition of letting you to trade options in stocks and stock indexes, an option account has the same conditions of a margin account. For an inexperienced investor, playing with options can be risky so brokers have their clients sign a statement that indicates they are familiar with risks involved in it.

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When it comes to the fees the brokerages cover, we want to tell you that most trades have been commission based per trade and non discretionary. Keep in mind that a discretionary account is when you allow the brokerage company to decide which stocks to purchase and sell on your behalf or absence without the broker needing to inform the client of each step. A brokerage has to buy or sell stocks with client approval in a non discretionary account.

Before you start trading, must link your brokerage account with your personal bank account. This is because in this way you can easily transfer money in and out of your brokerage account. If you plan to trade stocks for a living and want monthly or weekly withdraws to pay your expenses, this comes very handy. Once the account has set up, now you can start trading. But before doing that, you have to put together a powerful and effective trading strategy and be able to find stocks ready to go or down depending on how you are investing in them.

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