Day Trading Stock Tip - Questions To Ask An Online Trading Broker Part 3
Online Day Trading
Brokers -- Questions To
Ask (Part 3)
Here is Part 3 of the article about questions to ask a prospective
online day trading brokerage firm:
- Can you trade multiple instruments from
the same account (stocks, options, futures, etc.)?
- If you want to trade international stocks, do they have a list of
rules and taxation considerations they can provide you?
- Ask them what the procedure is if you have a resting order which, for
some odd reason, does not get executed by software. Example: if you buy
a stock at $25, and place a stop
market order at $24.50, and your order does not even get sent to the
market.
- Does the day trading-oriented brokerage firm offer any extra services like live market calls, new trader education, or discounts on training seminars (live or computer training)?
- Does the online trading brokerage firm offer "risk monitoring"? This means that you and the broker agree to pre-set limits on maximum daily losses, maximum number of open positions (either long or short), etc. If you reach or begin to exceed these limits, the broker would then be alerted and either contact you or control your trades due to your exceeding the pre-set risk levels. Not all firms offer this, but it is a "nice to have" as it means that someone else is also watching your account and risk concerns; remember that, unless otherwise specified in your contract, ALL risk is your responsibility even if the online broker offers risk monitoring.
- Do they offer access to all exchanges within the asset class? For example, for stocks you may be able to trade NASDAQ, NYSE, and AMEX stocks but do you get access to Bulletin Board and Pink Sheet stocks? For forex trading, do you have access to all pairs? For futures trading do you have access to all contracts, or just all e-mini contracts, or just all e-mini contracts which the clearing firm handles?
- Which data vendor is the software platform using?
- Can the online trading broker or the online trading software firm provide you with a list of symbols and index symbols (such as for the Dow Jones Industrial Average, the Semiconductor Index, etc.)?
- Are there certain market "internals" which you cannot access due to the data vendor chosen? For example, are you prevented from getting the S&P Fair Value or the NYSE TICK indicator?
There are several more questions you can ask, but these are a good start and may be ones you didn't realize... even if you are a seasoned online day trader!
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