If you decide to trade on the exchange, you have two ways. The first is to trust a manager. This way will suit those who have no time or desire to invest on their own. The second option is to do everything yourself: develop an investment strategy and take responsibility for the trades. Create your own bitcoin up account and try yourself.
However, you will not be able to enter the exchange market and trade by yourself. You will need a broker, an intermediary between an investor and an issuer, i.e. between you and the company whose securities you are going to buy. A broker is a company which has a license to work on the stock market and which has the right to execute securities transactions for the investor.
How to interact with a broker?
Make a contract with a broker. Study the terms of the brokerage agreement. Generally, brokers publish a standard contract with rates on their website. If you are satisfied with the rates and other terms, you can conclude the contract in the broker's office or send notarized documents by mail. You can also execute an agreement using remote identification.
Set up a securities account. The securities you buy must be accounted for somewhere. To do this, you need to open a custody account (an account for recording securities) at a custodian. The depository may be a separate company, unrelated to your brokerage. But often, in addition to a brokerage license, a broker also has a custody license and combines the two functions.
Wire money to your broker so he can buy securities for you. The best way to keep track of this money is to open an Individual Investment Account (IIA). It will allow you to save on taxes.
Now you are ready to trade on the exchange - you can instruct your broker to buy and sell securities. You can do this over the phone, online, with a special program, a trading terminal or through a broker's mobile app.
The broker executes operations on the stock market on your behalf. In addition to money for the purchase of securities, a commission is deducted from your brokerage account - a fee for helping you carry out these operations.
You can use the broker to make withdrawals to your bank account. You may also be charged a fee for this. The broker will calculate and withhold tax on your income. For residents of the Russian Federation (that is, for people who stay in Russia for at least 183 days during the year) it is 13%, for non-residents it is 30%.
How to choose a broker?
It is important to remember that the money in your brokerage account is not covered by the deposit insurance system, unlike bank deposits. Therefore, your task is to find a broker that is as reliable as possible.
What to study and what to check when choosing a broker:
First of all, check in the directory to see if the broker has a license as a professional securities market participant. If not, it's a crook.
Make sure that the name of the company in the registry is exactly the same as the one the broker states in the contract. It may turn out that the broker offers you to sign a contract with a "partner" foreign company that has almost the same name. It is very risky to agree to such an offer. If you sign a contract with a foreign broker and he violates your rights, you will have to defend your interests in the country where he is registered. The Russian regulator, the police and the court will not be able to help you.
Study the list of the largest brokers. Large trading volumes do not guarantee you complete peace of mind, but it means that the company has many clients and they trust it with significant capital.
Study the broker's website, read customer reviews online. Pay attention to the company's history - whether its name has not been associated with financial scandals. Search the financial news - in case you hear something interesting about your potential broker.
Before you sign a contract with a broker, read the risk notice. This document details what can cause you to lose money trading in the securities market.
Terms and Conditions
Carefully review the brokerage's terms and conditions. Pay attention to the details: fees, timing of money transfers, interest on loans - if you plan to buy securities at the broker's expense. Find out if the broker can use your money and securities for their own purposes. Find out how much the commissions will increase if you prohibit him from doing so.