The investment environment today is far different than it was just a decade ago. The good news is investors now have far more options to profit from market volatility. In today’s fast moving markets it is sometimes necessary to have multiple accounts. First, let’s take a look at why you might want to open multiple accounts with your broker.
Reasons for Opening Multiple Accounts:
1. Increased Flexibility – Multiple accounts increases your flexibility and your ability to react quickly to market movements. Depending on your brokerage, their might be rules in place that would limit you from taking on certain positions if you have all your money in a single account
2. Trading Execution Benefits – You’ll almost never find a full-time stock trader who has only one broker account. Why is this? It really is beneficial to a trader to have the ability to trade from multiple accounts because of the rules and regulations in place today. Day trading limits can be met quite quickly, and many traders now wish to have multiple accounts to maximize their long and short opportunities. You’ll have more leverage to make the trades you want right away if you have more than one account.
3. An Account for Each Type of Investment – Many investors find great benefit to opening multiple accounts with a broker so they can have an account for each type of investment. For example, you might have one account with mutual funds in it, one account with futures, and one account with individual stocks. This can help you keep everything in order.
Many software trading systems will allow you to link multiple broker accounts into one trading platform, which can give you the best of both worlds. The ability to track all your possible investments in one spot, but still have multiple accounts with your broker. Most brokerages will allow you to open multiple accounts, and the process is usually very simple.
Which online brokers have the best reputation for user-friendly multiple account management? See our guide to the Best Online Brokers.