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Why Do I Need a Stockbroker?

A stockbroker is the agent between the stock exchange and the buyer/seller. Learn about stockbrokers here.

By definition, a stockbroker is an individual or an organization having the authority to buy or sell stocks on the stock exchange on behalf of clients. He is an agent who exercises a transaction as directed by the buyer or the seller, and charges a fee for this service.

A stockbroker is an individual or an organization having the authority to buy or sell stocks on the stock exchange on behalf of clients.

Do I need a stockbroker?

Yes. In order to invest/trade in the stock market, it is important to open a demat/trading account, and only stockbrokers have the authority to open such an account for investors.These brokers are governed by Securities Contracts (Regulation) Act, 1956, SEBI Act, 1992, and SEBI Rules and Regulations, 1992.

Apart from this service, stockbrokers provide many other optional services that might be useful for investors. Beginners often find it difficult to understand how the stock market works, and how to pick winning stocks. The terminologies, the rules and regulations, market trends, etc. seems a bit alien to new investors.

In such a scenario, stockbrokers can play an important role. They have the requisite knowledge and can explain the fundamentals of the market, the tips and tricks to participate in the trade, and help you invest according to your financial goals..

How do I register with a stockbroker?

There are a number stockbrokers/brokerage houses all over India. These brokers are required to follow uniform rules pertaining to service tax, security transaction tax, stamp duty, etc. However, other charges like brokerage amount, annual maintenance fee, etc. varies from broker to broker. Conduct some research online and consult with family and friends if they trade in the market to find a few choices. If not,a financial advisor can refer one for you. After selecting the one that suits your requirements, you can enter into a broker-client agreement to start using your broker service.

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