Opening a brokerage account is the first step to start trading on the stock market. The main trading opportunities depend directly on the selected account. That is why we decided to share detailed information on how to open a brokerage account and what you should pay special attention to.
What is a brokerage account?
To begin with, let’s define a fundamental concept: a brokerage account is a special account provided by a broker. It is used to carry out all financial transactions, including the purchase and sale of assets.
How to open a brokerage account?
In fact, it is very easy to open a brokerage account, as most brokers allow you to do so online. It is enough to choose a broker; complete an application to open an account, indicating the type of account; Obtain broker approval and provide scans or images of necessary documents. Opening an account is free. There is also no minimum deposit required in the first stage.
Types of brokerage accounts
Brokerage accounts allow full trading of exchange-traded assets, not only stocks, but also, for example, precious metals, cryptocurrencies or additional exchange-traded instruments – CFDs and others.
An important moment is the type of brokerage account selected, which determines the settlement procedure and the amount of additional payments, as well as a number of basic restrictions. Choosing the right plan, First of all, it is worth evaluating the following parameters:
- Exchanges and instruments available;
- Minimum deposit amount: funds you must deposit to start trading;
- Leverage: the amount of borrowed funds provided by a broker, the value of which exceeds your personal funds;
- Account currencies: rubles, dollars or euros;
- Available trading platforms: programs that, in addition to performing operations, also provide the exchange statistics necessary for business planning;
- Access to mobile commerce: commerce from a smartphone or tablet.
And the last thing to pay attention to is the costs of payment for related services, which also depend on the selected plan. The best decision is to choose according to the proposed business strategy:
The most important thing for passive trading (gradual portfolio replenishment and infrequent trading) is the amount of the monthly payment for using the account. For active trading: brokerage commission for each transaction. Therefore, the smaller it is, the more profitable each transaction would be.