TFMS Brokers

Brokers:

...meals with a spoon, sometimes a fork really comes in handy. The same thing applies with brokerage firms. Full Service Brokers offer the widest level of products and services to their clients. You generally have access to firm generated research (Some of it is trash, some of it is surprisingly very good).

With most full service brokerage firms you will have one person you work with (your broker), part of whose job it is to get to know you, your situation, needs and objectives. He is available throughout the day if you have any questions about the market, need some help researching the fundamentals of a company or to place a trade for you.

Full service firms are generally geared to a person who does not watch their investments on a very active basis. Due to the extra level of service commission costs are the highest with full service firms. A good Full Service Broker is a valuable ally in the markets, especially if you are a new investor and need some help with your long term planing. Due to the cost structure they would not be well suited for trading actively.

Online Brokerage Firms are a relatively new development on the scene and have experienced tremendous growth over the last 5 or 6 years. Most of them offer a flat rate commission which tends to be very low since they do not have the high overhead that a Full Service Broker has. With some of them orders are submitted directly to the market, with most when you request to buy or sell something an email is sent to a broker who then places your trade. Examples of Online Brokerage Firms would be Charles Schwab, Fidelity, Etrade and Ameritrade. Online Brokerage firms are well suited for Position Traders and less active Swing Traders.

Direct Access Brokers are the newest type of brokerage firm. They specialize in the needs of active traders primarily through the use of proprietary, non-web based trading software that offers you direct access to the market. Many of these packages integrate real time quotes and charging, and nearly all of them have dynamic account updating. While costs have come down substantially at Direct Access Firms (When I started trading it was $25.95 per side to trade stocks regardless of your size) you should still expect to pay more with a direct access broker then you would with an Online Broker. Some of the more popular Direct Access Brokerage firms are MB Trading, Cybercorp, Terra Nova Trading, E-local Trading and Interactive Brokers.

A note of caution, some of the Direct Access Brokers have had a tendency to be rather unscrupulous. I have personal experience with management and many of the "front line" employees of each of the firms listed above and you would not go wrong with any of them.

DISCLAIMER: Trading in securities may not be suitable for all individuals. Consult your broker or other professional to determine
your suitability. The discussions provided by Trading From Main Street are for educational purposes only and should not be taken
as a recommendation to buy or sell the referenced security. Past performance is not indicative of future results.

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