Trading has become a common phenomenon all over the world. People want to invest in another type of security traded on the stock exchange in order to earn substantial returns on their investment. However, with digitization and Dematerialization of shares, the process of investment has become time-consuming. Moreover, traders who have just begun trading on the online stock exchange feel intimidated by the process.
Traders who want to deal with securities like shares and debentures have to open a Demat account which helps an individual to buy and sell securities in electronic format. Opening of a Demat account and various other prerequisites must be fulfilled before trading on the stock exchange in the 21st century. Brokerage firms provide such services and help traders with the process of opening a Demat account. It has become a necessity for traders to employ the services of brokerage firms. There are numerous low brokerage high exposure stock brokers in India who ensure the investment portfolio is diversified enough to ensure maximum returns and minimum risk. They provide a lot of services and benefits to traders like:
- Underwriting and agency services:
Brokerage companies help companies by underwriting their subscriptions. They help companies by promising them to subscribe to the shares if left unsubscribed by the general public. They even help the company by providing various agency services like accepting and returning the subscription amount to the general public. Companies who float their shares on the primary share market employ the services of underwriters who help in selling the shares and even buy the shares if not bought by individual traders in the stock market. They charge brokerage or any type of fee to provide the service to the companies.
- Market analysis and sharing the same information with the traders:
Brokerage firms employ skilled and knowledgeable brokers who conduct timely stock market analysis for picking the best stock options for traders. They provide important information about the stock market and its trends which help the broker make informed decisions.
- Accounting and keeping record of transactions:
Brokerage firms and brokers help traders by keeping updated records of various transactions that they have entered into over a period of time. They also undertake accounting activities and carefully analyze the amount of profits traders have earned over and above their investment.
- Providing the services of the depository participant for a trader:
Brokerage firms help in the creation of excellent investment portfolios and provide the services of depository participants like safekeeping of electronic shares and other forms of securities etc. They also assist traders by investing on behalf of traders but after prior approval. They keep some amount of money separate for investment in value stocks and shares which make them indispensable for any trader.
The services provided by the brokerage firms and individual brokers to companies and traders are unparalleled. Traders and even companies must look for the above-mentioned services provided by a brokerage firm. Low brokerage high exposure stock brokers in India provide an added benefit of receiving greater revenues in terms of return from the invested amount. Moreover, greater diversification in an investment portfolio ensures better coverage of risk.