How to Open a Brokerage Account?

Opening a brokerage account is the first step to start exchange trading. The main trading opportunities directly depend on the selected account. That’s why we decided to share detailed information about how to open a brokerage account, and what you should pay special attention to.

What Is a Brokerage Account?

To begin with, let's define a fundamental concept: a brokerage account is a special type of account provided by a broker. It is used to carry out all financial transactions, including purchase and sale of assets.

A broker can offer one or more accounts (plans) that may differ significantly in terms of use, which can be more or less beneficial for a trader. For example, they may differ in minimum required deposit, availability of access to some exchanges or currency.

How to Open a Brokerage Account?

In fact, it is very easy to open a brokerage account, since most brokers allow you to do this online. It is enough to choose a broker; fill out an application for account opening, indicating the type of the account; get approval from the broker and provide scans or images of necessary documents.

Opening an account is free. Making a minimum deposit at the first stage is also not required.

Types of Brokerage Accounts

Brokerage accounts enable the full-fledged trading of exchange-traded assets, not only stocks, but also, for example, precious metals, cryptocurrencies or additional exchange-traded instruments — CFDs and others.

Plans

Another important moment is a plan of the selected brokerage account, which determines the procedure of settlements and amount of additional payments, as well as a number of basic restrictions. Choosing the right plan, first of all, it is worth evaluating the following parameters:

-  Available exchanges and instruments;

-  Minimum deposit amount — funds that you should deposit to start trading;

-  Leverage — the amount of borrowed funds provided by a broker, the value of which exceeds your personal funds;

-  Currencies of the account — rubles, dollars or euros;

-  Available trading platforms — programs that, in addition to performing operations, also provide the exchange statistics necessary for trading planning;

-  Access to mobile trading — trading from a smartphone or tablet.

And the last thing you should pay attention to is the features of payment for related services, which also depend on the selected plan. The best decision is to choose based on the proposed trading strategy:

-  The most important thing for passive trading (gradual top-up of the portfolio and infrequent trading) is the size of the monthly payment for using the account.

-  For active trading — brokerage commission for each transaction. Accordingly, the smaller it is, the more profitable each transaction would be.