Discount Broker

Business, Legal & Accounting Glossary

Definition: Discount Broker




What is the dictionary definition of Discount Broker?

Dictionary Definition


A discount broker is a stockbroker who sells and buys stocks with a reduced commission. Discount brokers provide the portal to electronic trading infrastructure at a fraction of the cost of a traditional broker.


Full Definition of Discount Broker


A discount broker is a stockbroker offering low commission rates. The low rates offered by a discount broker are primarily achieved through automation of trading and customer service. A discount broker will often have access to alternate quotation services, allowing trades to execute without incurring exchange fees. A discount broker may also specialize in high-volume trading, reducing rates even further by offering ECN rebates to traders providing liquidity. So-called zero commission trading may be offered by a discount broker. This may be a false economy for thrifty traders; instead of making money on a commission, the discount broker makes their money by either widening the spread or selling the right to execute the order to a market maker who can widen the spread. The discount broker business is extremely competitive, and rates change on a regular basis.

Advantages

On Cost– They charge a fraction of what traditional brokers used to charge. With the rising prevalence of discount brokers, nearly everyone can trade.

Minimum Requirements – Discount brokers also score above others when it comes to the amount of documentation required to open an account. Many discount brokers claim that you can open an account and start trading in a couple of minutes.

Customer Service – When using a discount broker you will be doing all your own trading online through their platform, but from time to time you will need to get in touch with customer service:

  • LiveChat
  • Phone
  • Email
  • Face-to-face support in their branches

Variety Investments Offered:

  • Stocks
  • Options
  • ETFs
  • Mutual funds
  • Retirement funds

Trading and investing tools offered: 

  • Mobile trading
  • Fast execution
  • Level I & II quotes
  • Automated trading, watch lists
  • Great charting and graphing tools
  • Real-time updates and streaming quotes
  • Solid research & screening tools.
  • Dow Jones News & research analysis is free
  • Interactive learning resources
  • Watch lists (sync with mobile trading apps)
  • Powerful screeners
  • Customizable TradeArchitect web-based platform.
  • Advanced think-or-swim platform for professional traders
  • Free independent research from Morningstar Associates and S&P
  • One-click trading
  • Customizable in-screen access to fundamental and technical analysis tools
  • Visual tools, heat maps, P&L graphs
  • Probability and volatility of technical analysis tools
  • Ability to enter trades through various popular 3rd party applications

Educative material

  • Information or knowledge on shares would be provided on the website
  • It would come with a disclaimer though that they are not advising any buy or sell

Cite Term


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https://payrollheaven.com/define/discount-broker/
Modern Language Association (MLA):
Discount Broker. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 28, 2021 https://payrollheaven.com/define/discount-broker/.
Chicago Manual of Style (CMS):
Discount Broker. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/discount-broker/ (accessed: September 28, 2021).
American Psychological Association (APA):
Discount Broker. PayrollHeaven.com. Retrieved September 28, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/discount-broker/

Definition Sources


Definitions for Discount Broker are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 16th April, 2020 | 0 Views.