As a broker at Daniels Trading, I speak to different traders on a daily basis. The major factor that allows our firm to service different types of traders is flexibility. When determining what type of service or account type is the right fit, traders are often grouped into two main categories: broker-assisted or self-directed.
A broker-assisted trading account is exactly that. A client calls in a trade to an actual person, their broker, to have him or her enter the trade. A self-directed trading account is typically one where there is very little human interaction, and a client relies only on the trading technology or platform provided to them by the brokerage firm to enter their trades.
The purpose of this article is to inform traders that there is actually a third category available that I refer to as the “hybrid” trading account. This is an arrangement where a client has the ability to place trades online but also has a relationship with a broker to call in and place trades over the phone.
Why would someone want to have a hybrid trading account versus just completely broker-assisted or completely self-directed?
Flexibility. Perhaps someone that trades the futures markets has another job and is simply not a full-time trader. Sometimes they are in front of a computer and able to access the markets and place trades online. Other times, their job or daily life doesn’t allow them to be in front of a computer, in which case, they can call their broker for updates on positions, quotes on the market, or to place trades.
Another reason that this arrangement is popular is because traders value relationship. Knowing that there is someone that you can call to talk to about your current trades and perhaps get ideas from can provide additional comfort.
Communicating with your broker and brokerage firm is the key to making the hybrid trading account work. The more you communicate about how you want things to work, the more satisfied you’ll be with your account and relationship with your broker. The convenience of a hybrid trading account for the trader and the flexibility of the broker to be able to provide this arrangement make it a good fit for many traders.
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