Selecting A Great Full-Service Better Trades Broker
by Loredana Sargu
I have taught thousands of students all over the USA how to trade with safety nets and insurance. I am just as excited about profiting from falling stocks as I was during the BULL MARKET. In addition to profiting in any market, and playing it safe it is also important to work with a broker that will benefit you. Your broker is an important key to your trading success.
I am often amazed at how many students are not happy with their full service broker. Yet when I ask them how long they spent looking for one, the answer is usually unreasonably low. The truth of the matter is they have taken little time at all to interview and check out different brokers.
I would like to take this newsletter to discuss how to select a great stockbroker and related items.
First, there is a large misconception about brokers and brokerage firms. I have written an entire book about this called THE TRUTH ABOUT BROKERAGE FIRMS, which is available for $34.95 by calling 1-800-346-9039. It may save you thousands of dollars to read this and apply the information given, and you will have it within minutes by e-book.
The truth of the matter is, most people don’t even try to call a few brokers. They just get a broker by referral and never ask questions. I remember spending hours calling brokers and asking them various questions before I finally selected one, which to this day I am still using over 5 years later.
First, you want to make a list of what it is that you want in a broker, so I will give you a list of what I love about my broker to give you some direction:
1. My broker understands options, and is able to place the orders quickly. He knows how to pull up the option chains and get what I need
2. My broker sets real time alarms on both the stock and the options for me, and calls me when the alarms go off so I can initiate my trading plan
3. He shows up before the market is open, so I can call him to go over my potential trades before the market. This speeds up the trade when I am ready to place one.
4. My broker answers his telephone when I call, or it goes to his assistant who personally trades options, knows me and my account number, and can meet my needs or page my broker out of a meeting to help me.
5. My broker does not leave during lunch. Actually, he is on Seattle time so he can eat after the market closes. If he does leave, he lets me know a day or so ahead.
6. I get discounted commissions for full service, which are about 50% off.
7. When my broker goes on vacation he gives me weeks notice, and make sure I am set up to go with a reliable broker that will understand my needs while he is out.
8. My broker personally trades.
9. He has his own computer to watch the market and charts, and I can call him from anywhere and have him pull up a chart and tell me what is happening, he can read charts.
10. My broker is able to drop my orders, versus it going to another person who enters it and a long process to get to the floor. My current broker sends it direct to the floor from his computer, for fast fills.
11. My broker tries to get me better fills than I ask for.
12. My broker has access to a Bloomberg terminal and can do research and fax and e-mail information to me.
13. My broker has a toll free line, if I want to use it, although often I don’t. I like to call in direct to his line so he is on the other end of the phone.
14. I got to know my broker, send him Christmas and baby gifts, etc… and take him out to dinner with his wife if I am in town. Building a relationship pays off.
15. My broker does not make decisions for me on my trades. He let’s me. However, I am not offended by him giving me input and I will take that into consideration in my pre-set plan. Once my broker talked me into exiting a trade when I was up over $18,000 and as soon as I sold the stock fell heavily.
In order to find such a broker, it could take you one hour a day for two weeks calling different firms to interview brokers. But if you found one like this, it would be worth the time. Most students never even spent an hour trying, it’s as if they thought one would possibly show up sub-consciously.
If you are unhappy with your current broker I would get a list of brokers, start calling and asking to speak to someone who specializes in options and then start talking to them. Don’t call during market hours, that would be unfair. Call a few minutes after the market closes, since most brokers don’t stay around too long after the market closes. You could call during the market to set up an appointment to talk after the market.
I would tell the broker that I just want to put a few thousand dollars in, until I can build a relationship with this firm. So you don’t have to admit you have a small amount to trade with, if you only have a small amount.
Be up front, I am interviewing brokers this week, to open an account. Ask questions:
1. Can you tell me about your experience with options?
2. Do you personally trade?
3. Do you trade options? If so, how many trades in a month?
4. What strategy do you play?
5. What is your track record for your clients?
6. How long have you been a broker?
7. How does an order get to the floor from you?
8. When do you get in, leave for lunch, and when do you go home?
9. How easy is it for me to reach you to place a trade?
10. Who handles your accounts when you are gone, and how good are they?
11. What is the minimum to open an account to trade calls and puts?
12. Tell me why I should open an account with you?
You should be able to tell right away if a broker does not trade. If you are not sure, ask them to explain to you what writing a covered call is or their favorite strategy.
Usually you can tell right away if you have a personality conflict and would not like to use a broker. In that case quit asking questions, thank them for their time and get off the phone. Cross them off your list. It really helps to actually like your broker.
Keep in mind that you do not need to have a broker in your home town, or even your state for that matter. I have more than one broker, and none of them are in my state. Don’t limit yourself.
Bottom line, your broker is your key to successful trading, even the best of strategies can be ruined by inefficient brokers. Take the time to choose a broker wisely, and it will pay off for you.
In my book, THE TRUTH ABOUT BROKERAGE FIRMS, I discuss things to look for in your account application to avoid giving up control of your stocks. It is very important for you to understand the politics behind brokerage firms to get the most out of your broker, but it is beyond the scope of this newsletter so I recommend you get the book and read it immediately. You can order it and have it by e-book today to aid in fine tuning your search and fixing your account application to benefit you.
Now that you have information on how to begin by finding a good broker, it is time to step up your trading confidence and learn how to be efficient trading with safety net alarms and using insurance to protect even a bad trade from wiping out your funds.
Darlene Nelson with Better Trades
Content Source: Better Trades Tutorial freely available from Better Trades Options
Article Source: U Publish Articles
Original Source: Selecting A Great Full-Service Better Trades Broker