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Online stock brokers number in the thousands. A stock broker is a professional who buys and sells shares and other securities through the stock market on behalf of investors. A stock broker may be employed by a brokerage firm. In years past, investors had to visit or call up their stock brokers to place an order. The broker would then enter the order in their system which linked to trading floors and exchanges. Trading has changed dramatically in recent years due to the internet. Investing online has now become the new normal for brokers and for individual investors and traders. Most, if not all brokers now offer online services. Investors can enter orders directly online, or trade with other investors via “electronic communication networks” (ECN). One difference between online stock brokers and full service brokers are that the latter also gives investing advice to clients. For this reason, online brokers are generally referred to as “discount brokers.”

Anyone looking to invest should research online stock brokers thoroughly. Make sure they are licensed within their state or provincial jurisdiction. The USA Federal Government also provides tips to avoid investment scams via their OnGuard Online website. One of their tips: "Don't believe everything you read in online newsletters, investing blogs, or bulletin boards. Fraud artists often float false information and "hot tips" as part of their efforts to rip-off investors or manipulate the market for a particular security." Research should include looking for an online stock broker through the U.S. Securities and Exchange Commission’s database (EDGAR) and your state’s securities regulator. Commissions vary from broker to broker, depending on their services.

More and more individuals are choosing to do their own online investing, enjoying the experience and control of investing their own money. They should fully understand the risks, however, of not using the help of a trained stock broker or investment advisor.


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