A number of people say that online stock brokers provide cheaper service. This is because even though they deal in the same stocks as traditional brokers, the way an online stock broker trades, makes his services available for much cheaper prices.

Online stock brokers are running an online business. They do not have to maintain elaborate paperwork. Nor do they have to bother about keeping shiny, posh looking offices. Compare Fidelity Investments and other online brokers with full-service brokers, and you will see that the difference in price is significant. They are able to cut costs and the benefits they get by cutting costs gets forwarded to the customer in form of cheaper online stock broker service.