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offer discount services as well to compete with the discount-only brokerage firms.

Deep-Discount Broker - As a recent type of brokerage firm, and catapulted onto the scene with the help of the Internet and electronic transactions, the deep-discount brokerage firms are undeniably the fastest growing brokerage type in the industry. Most customer interfaces are done over the Web, therefore frequently the deep-discount brokerage firms are also referred to as online brokers. By cutting out most of the live brokers and taking advantage of automatic electronic transactions, the online brokers are able to offer their customers inexpensive trading. Commissions can range between $7 to $30 per trade, so we are talking cheap here. However, there are downsides:

• You do not deal with a live person; instead you use the Web to place orders.
• You do not receive personalized service; instead data is provided to you and other investors online. You have to do the digging.
• As with any electronic medium, their systems are prone to crashes, slowdowns, or bugs. Many times traders have been locked out of trading in crucial times, as the online systems have succumbed to trading stampedes and crashed, abandoning many transactions in the process.
• Reaching a live broker, especially during system outages, takes a lot of patience. Hold times of up to two hours are well known.
• While full service or some discount brokers may allow you to buy a stock with the promise of your payment, deep-discount brokers require money in the account before they can fill any orders. …