Discount Brokers Offer Sign Up Bonuses To Lure Customers In
Competition on the online brokerage is fierce. The first round of competition was to slash trading commisions in an effort to get more customers to sign up. Some discount brokers have slashed their online tradking rates all the way down to $3 per trade. That is unheard of when you are used to trading with the full service brokers that average around $20 per trade. This price lowering has even made some of the larger brokers like Fidelity reduce their commissions just to stop the mass exondus of online traders moving to cheaper discount brokers.
Now that trading commissions are as low as they can possibly get, brokers have now turned to a new account bonus concept to keep the flood of new customers going. At any given time you can find a new brokerage account promotion out there. Currently there is a Tradeking Bonus where you can get $50 when opening a new account with them. Other brokers have answered that promotion. Once example is the OptionsXpress Bonus where they are offering a $100 sign on bonus. Other brokers are providing up to $100 free trades to get you to come aboard.
The question is, are these bonuses just attracting those looking to get some quick cash, or are they brining in the long term investor? Many of the bonuses require you to keep your account open for a certain time period and others require you to make so many trades to qualify for the payout. If you are a casual trader these cash bonuses can equate to a number of free trades that can esentially make your transaction costs zero for the first number of trades. Everyone knows that keeping your transaction costs low can increase your profits and the same applies to stock trading.
If you are in the market for a new brokerage account take a look around to see what bonuses are available for the broker you want to open an account with. Do your research and select your broker based on features and not the incentive they are dishing out to sign up. Once that bonus is gone, you want to make sure the account is stull useful for your purposes.
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