Brokers & Price Improvement

Let me say again that the right brokerage can make investing and
trading a much more enjoyable and profitable experience.

Quickly, let's take a moment to cover what's known as Price Improvement.

Price Improvement .. is an attempt by the brokers to get you a better than
the asked price if you buy a stock, and a better than the bid price if you
sell your stock. Many brokers claim to offer this improvement in price, but
don't expect any of them to go out of their way to make sure you get it.

The Nasdaq market regulators are on track to phase in mandatory price
improvement rules starting in 1997. This will force all brokers to take the
necessary steps to inform buyers and sellers as to whether or not they actually got price betterment on their stock transactions.

You've now got enough information to start your own search for a broker.
Understand that price is not the only consideration when choosing your
broker. (But it is a big one) You want fast trades, executed in an efficient
manner, with prompt confirmation, of each and every order placement.

You should also understand that you should (know what you're doing),
before you yank the brokers chain about something not being just right.
But then again .. don't be timid about asking questions if you think that
something's amiss. Many of these computer desk-jockeys make mistakes.

For those of you that think there's not much difference between a broker
that charges $9.95 for a trade, and another that charges $28.95 for a
trade .. well .. think again. That's a $19.00 difference! Two trades a day
is $38.00. Five trades a day is $95.00. Twenty trades a week is $380.00.

The savings on those twenty trades is a nice car payment. Some people
make forty to fifty trades a month. That's a savings of $760.00 to $950.00
for one month. We're talking house payment here. It's not likely that you'll
start out making this many trades, but who knows. It happens!

The lesson here is a simple one. Find a broker that offers low-cost trades and great service. Even a ten dollar difference adds up to big money.