FINANCE BROKERAGE.December 17, 2020
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent—one who acts on behalf of a principal party in a deal.
Brokers can furnish market research and market data. Brokers may represent either the seller or the buyer but generally not both at the same time. Brokers are almost always necessary for the purchase and sale of financial instruments.
A broker-dealer is a broker that transacts for its own account, in addition to facilitating transactions for clients.
What is a financial brokerage :
A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members.
What does a financial brokerage firm do :
Brokerage companies exist to help their clients match the other side of a trade, bringing together buyers and sellers at the best price possible for each, and extracting a commission for their services. In the financial markets, several different types of brokerage firms offer a wide range of products and services.
How does a brokerage firm make money :
The trading firms can make money by picking up the tiny spreads between the prices offered by buyers and sellers, or by trading on any gap between the futures market and stock prices Brokers and the trading firms say this process results in a better deal for retail investors.