Researching your broker is always a part of a good investment plan. But in today's world of new technologies and online investing, what questions should you be asking?
Here are some important questions you should ask your broker that can save you time and money:
- How quickly do orders get filled? Keep in mind that trading online can speed up the process of placing an order by a lot compared to placing an order over the phone.
- What tools does your broker offer you? Key tools for traders include stock quotes, news, charts, level II data, and advanced order types. Make sure that your broker has the tools that you need.
RushTrade's Direct Access Trading, for example, lets you send your order to the execution venue of your choice. This can make your orders go through faster, get you a better price, and give you more control over them.
Does your broker get paid for order flow? Some brokers may receive payments for sending orders to preferred market makers. This can make it hard to decide what to do. Make sure you know the rules of your broker.
Do they offer a free trial of trading? Find out if a trading demo will cost you anything. For example, RushTrade gives away a free demo of its Direct Access software on its website.
Is it easy to use the website or trading software? When speed is the name of the game, having to deal with a site that is slow or hard to use can really slow down your trade executions.
Can I trade after business hours? Ask yourself if this is important for what you want to do with your money. With RushTrade's Direct Access software, you will be able to trade after hours.
Are there any hidden costs? Brokers may tell you that they have low commissions, but then hit you with fees you didn't expect. Look for brokers that do not charge low balance, inactivity or maintenance fees.