Execution only brokers
Execution only brokers, as their name might suggest, only execute your order. They do not provide advice on which shares to buy and sell, but simply process the transaction. Execution only brokers are sometimes termed ‘discount’ brokers, because their rates are a lot lower. You may even pay less than $20 in commission on every transaction—a far cry from a decade ago, when full service brokers had free reign to charge exorbitant commission rates.
There are two main ways to transact through an execution only broker. The cheapest is usually online, via the internet. In most cases you can track your order as it goes to the market immediately. You can usually place an order by phone as well—perhaps even by speaking to a real human being—although don’t ask for advice. You’ll get short shrift from the operator, and you will usually pay slightly more than you would online anyway.
While execution only brokers don’t provide advice, these days they do provide more than just order processing. Many provide free research, various tools such as charts and other data, and some even give you access to floats as well.
