When opening a new trading account, most people will compare several discount brokers before choosing where they want to make their trades.
But what if you want to go beyond comparing listed fees and commissions? What if you want to choose more carefully?
These are not rules; they’re just suggestions that can improve your experience as a trader.
Do your research
The first step is pretty obvious: do research.
Find out who has good reputations among traders, good ratings online, and which experts frequently recommend brokers.
Compare all-in costs of each broker you consider
It is a pretty straightforward step that many people forget to do. Ask yourself: “What does it cost me to trade with this broker?”
There’s commission – how much does each trade cost you? – as well as other costs like slippage, ECN fees, data feeds and so on
By looking at all the costs involved, you’ll have a better idea of what your total trading costs will be.
In turn, this can give you a better sense of how much money you need to make from each trade for your account to break even.
Check out the broker’s margin requirements
Margin requirements can affect your trading strategy.
If you have small accounts, you might want a broker that allows a lot of buying power – this way; you can avoid frequent margin calls and keep your trades going as long as possible.
And if you have large accounts, you’ll want a low minimum margin requirement so that you don’t have to use too much money from your account to make each trade.
Of course, no one is saying that having a lot of money in the bank isn’t great – but it’s best not to overdo it.
You don’t want to lose all of your capital on any given trade.
That said, if the broker has a high minimum margin requirement, you might want to consider a different broker.
Make sure the broker provides good customer service
Customer service is essential. It can be hard to get in touch with support if you have a problem during trading hours, and it’s even worse if they don’t provide phone support.
In addition, quick email response times are also critical (less than one hour), especially considering how many questions traders typically have when they’re just getting started.
And finally, fast execution times are excellent, too; the last thing anyone wants to see is an order that takes 10 minutes to get filled, or worse yet, get cancelled.
Live support is a must-have for many traders
Live support is a great feature. It’s not extremely common among UK brokers, but if you’re planning on speaking with someone while placing your trades, it’s something that you’ll need to look for.
Additional Services And Features You’ll Need To Consider Checking Out Are:
OCO orders
OCO orders ( Order Cancellation Orders ) are beneficial for multi-leg options strategies, where the maximum loss on any position is known in advance.
With an OCO order, you can designate two prices for the same option trade; one price would be your maximum loss, the other your target profit.
To trigger the order, you must hit one of those prices first. If either price is reached, only that part of the trade will get executed.
Index options
These are derivatives on stock indices like the FTSE or DAX instead of individual stocks if you have existing CFD positions open on specific UK indices, rollover to new contracts before expiry through a simple process at no extra cost.
Individual stock options
Individual stock options are based on single equity rather than an index.
They’re similar to vanilla options but confer different rights and privileges stemming from their underlying asset being a specific corporate entity rather than a market index. Again, an excellent feature for stock traders.
Short selling
One of the most common complaints about UK brokers is their lack of short selling. If you want to place short trades, ensure that it’s allowed before opening an account.
For more information, link to buy stocks.
