Unit 4: Selecting a Broker – Part II

Unit 4: Selecting a Broker – Part II   (Revised January 3, 2022)

A decision has to be made whether to open an online broker account or/and to have a traditional broker, with a "Marketing officer" to help.  If a traditional broker is selected make sure that you are able to send orders through e-mail/phone and/or text messages, if you are not located in Thailand.  International telephone rates and time differences have to be taken into account and e-mailing stock buy/sell orders can be much more efficient -but may have a short time lag.  At times local broker telephone lines can go busy, especially if the SET market is active.  On-line trading is the way to go.  

Note also that brokerage commissions are bound to be much less when dealing with a Thai broker directly vs. if you buy/sell Thai shares from outside Thailand through a foreign broker.  Buying/selling with a US based brokers is not recommended. Charles Schwab and other US brokers will have relative high commissions when trading in Thailand.  These days the best way is through an on-line internet based broker system.

Make sure you get a marketing officer who speaks good enough English. Then make sure you keep that person as your broker.  "Bait and switch" is a concept frowned upon in the West but too often in Thailand this is what can happen.  Days, weeks or months later you may get "switched" to another newer broker who's English and knowledge may be lacking?  But these two points raised here are getting better now and so of lesser concern.  It is always up to you the investor to make very sure buy/sell orders and its prices and volume amount are stated correctly & clearly. If your marketing officer made a mistake, you should point this out immediately and demand they correct it if it cost you money.  Not just a "sorry".  I believe all phones conversations to brokers are recorded, unless its a mobile phone number?

Again if by person/phone:  be very careful entering your order(s)  and make sure the marketing officer repeat your buy/sell (and limit price) order, every time.  Also, all orders on the SET are "on that day" orders only.  In Thailand there is no such thing as a good-until-canceled order (GTC), or so called stop-loss orders.  The broker may promise you he/she will re-enter your order every day until filled -but if he/she is sick or absent, or just forgets -you are out of luck.  The broker should never take price or volume discretion, i.e change your price or size limit! This is a serious SEC/SET industry offense.
 
Buy and sell orders are filled based on your price limit given and solely on a priority status. Often the "early bird gets filled".  If you enter your order first then you get filled first should the stock price hit your stated price limit, even for a few seconds.  I usually advocate entering your orders well before the market opens at a limit price you are happy with.  Orders start talling up by 09:30 AM and the SET is open from 10 AM to 16:30 PM. Often the SET trading opens a few minutes before 10 AM, I never understood why this is so? As it should not.  There is a run off at 16:30 with a final matching just before 16:40 PM.  One can enter orders market-on-the opening (ATO) or market-on-the-close (ATC), which guarantees you get the opening/closing price.

Be acutely aware that your broker's phone can and will be busy at times, especially when the market heats up.  Nothing is more frustrating then seeing a high/low stock price flick by and then not being able to take the action you want.  Another reason why transacting on-line is best.  Never assume the Thai phones (or the electric, or the internet) are always 100% working but this has gotten much better in recent times.  Transacting on-line has become more and more the norm -and works very well.

I would not recommend buy and sell orders at "the market" prices, hence always specify your limit price.  Don't nickel and dime, if you are making a long term investment just pay the offering price, or hit the current bid price if you are selling.   Again, there are no "stop loss", so called "fill or kill" or "stop-limit” orders etc.  Thaistocks.com has raised this to the SET often as a tool long lacking here.  Daily price limit orders are all there is.  Again, one can enter an order "on the close", or "on the opening", in that case  you will guarantee get the opening/closing price.

Do not count on your broker to give you company news.  They may or may not as they assume it's not so important.  You should follow this yourself through the internet on the SET's home page (the "SET" web page is linked at the left column at our web page) or through membership at Thaistocks.com.   Look under "news" and then type in the company's symbol.  One word of caution, when quarterly earnings are released you must look under the heading "today's news", as they will first report earnings only at this location. Mgt. of the listed company will usually add a comment on the earnings if they moved up or down by more then 20%.

Never assume that any of the Thai newspapers report all the earnings, or that if they do its 100% correct.  It is often sporadic and mistakes happen. In general its still a "hit and miss" affair and not comprehensive nor totally reliable.  I like to always re-verify printed earnings report with the SET's official web site. These days the local press no longer reports prices, nor Q. earnings reports. Last but not least beware of Thai broker buy/sell reports as may I say, it leaves allot to be desired.  

Again for more broker review tips, see this link:  https://thaistocks.com/content/broker-review-tips-0