Definition: What are Discount Stock Brokers?
Discount stock brokers are stock brokers that provide a self-directed means for investors to buy and sell securities.
Discount stock brokers do not provide the full range of services that full service stock broker provide, which includes financial and investment advice.
Instead, they provide a full suite of tools for the individual investor to make his or her own decisions, and place his or her own orders. They do all this at a much lower cost compared to the fees charged by full service stock brokers.
Discount Stock Brokers – Additional Definition and Overview
Discount stock brokers grew in popularity when stock trading started happening online.
Companies started setting up websites where customers could indicate what stocks they wanted to buy or sell without having to go to a traditional stock broker.
Today, most discount stock brokers have highly advanced websites and platforms that allow customers to trade all types of financial instruments, while also providing numerous streams of financial data to help them make their investing decisions.
Discount stock brokers charge a minimal fee or small commission on every order placed by a customer.
In a lot of cases, customers with high levels of funds in their account are offered additional discounts on trading and investing fees.
The low fees charged by discount stock brokers have made investing in the securities markets more accessible. In the past, stock market investing was seen as an investment opportunity only for the very rich, but that is no longer the case.