5 Reasons You Need To Have More Than 1 Stock Brokerage Account
Ask any seasoned trader and odds are they will have more than one stock brokerage account. When it comes to our finances we would all prefer one main account; however, there are several benefits to having multiple brokerage accounts.
5 Reasons To Have More Than 1 Stock Brokerage Account
1. Better Order Fills. Whether you want to trade options, buy and sell stocks, short stocks, or whatever, there are just so many types of stocks and investment tools that only one brokerage can try to satisfy. Perhaps you want to short a particular stock, but your brokerage does not have any shares of that stock to borrow. If you had multiple accounts, your other brokerage(s) may be able to fill the order. At the same time, other brokerages might be able to get you shares at more optimal prices depending on the particular stock.
2. Ability To Execute More Trades. Be it by your brokerage or legal laws, there are restrictions that prevent traders to execute a certain amount of trades in a given time period, unless they qualify to be an active trader. Some of the guidelines usually require you to have a particular amount of money in your account and conduct a certain amount of trades regularly within a given time period. While that is all good, many of us just do not have the ability to consistently trade so many times or fund out account with that much money.
By having multiple accounts, we allow ourselves the ability to execute more trades without needing to quality to be an active trader.
3. Commissions Allocation. While some stock brokerages have flat-rates, others vary their commissions based on how many shares you are dealing with. Also one brokerage might have better stock trading commissions, but another brokerage might have better option trading commissions. By having multiple accounts we can easily utilize that particular brokerage that will limit our commissions fees for a certain trade.
4. Access To More Tools And Resources. Almost no online stock brokerage has the same type of tools and resources. One brokerage may have a powerful research platform, but another brokerage may have better commission rates. Why not research on one, and execute trades on another? Some brokerages also offer mobile trading applications to trade from anywhere.
5. Trade Foreign Market. While most traders are satisfied with trading on the U.S markets, there are occasions when they might want to trade stocks that happen to be on foreign markets. Not every brokerage allows you to trade in various markets, so by having multiple accounts you can always find a brokerage that will allow you to trade that stock.
Overall, while it may seem tedious and annoying to manage multiple stock brokerage accounts, if used correctly, the benefits can drastically outweigh the cons and even make you more money.
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