The share market traders need to consider a lot of factors before going for trading in the market irrespective of the segments. The brokerage and opening of a trading account are the primary elements that can affect the traders but at the same time, one cannot ignore the exposure offered by the brokers. For the retail traders, more exposure does not become a crucial factor as they do not trade much but for the bulk traders, it is an elementary aspect that must be checked before opening the account. Therefore the majority of the brokers prefer to go for the High Leverage Stock brokers as they can offer more credit and hence they can have a chance to make more profit by trading daily in the market.
Find the right broker first:
Before initiating trades in the account one must know the rate of brokerage and also the margin money he needs to provide and credit which he can have on margin provided. The credit or exposure offered on the margin varies from broker to broker and company to company. One needs to see that when he goes for trading in the specific market he needs to have enough credit in his account. If the credit limit is small and he does not have enough margin money to offer he may have to restrict trading. Hence he may have to lose important opportunities when he can make a good profit in the market. However, for the bulk traders, more credit is mandatory as they need to buy and sell shares frequently and in case of low credit, they can feel no trading options. Hence they may avoid going for such brokers who cannot offer more credit or exposure.
The pros and cons of high Exposure:
The high exposure has certain features that must be checked as the pros and cons of the same. From the client’s point of view, it is necessary to have a better limit as he can have better opportunities to earn more profit. With the help of more credit, the client can trade more with the same amount of margin money. On the other hand, the broker can also have better revenue earned as a part of the increased trading by the trader. Hence though one can say it is a win-win situation for both, there are many situations due to which the high exposure is not much preferred and the companies or brokers be much cautious before offering any extension in the credit limit to the client.
They check the history of trading as well as the pattern which can help them if the client has any specific strategy to trade in the market. They also check the terms with the client and see if he is financially sound so that in case of loss incurred by him, the pending amount can be recovered without any issue. The client also needs to pay more margin money in some cases if he wants more credit.