STOCK BROKING

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Stock Broking

A stockbroker is a professional trader who buys and sells shares on behalf of clients. The stockbroker may also be known as a registered representative or an investment advisor.

Most stockbrokers work for a brokerage firm and handle transactions for a number of individual and institutional customers. Stockbrokers are often paid on a commission basis although compensation methods vary by employer.

Brokerage firms and broker-dealers are also sometimes referred to as stockbrokers. This includes both full-service brokers and discount brokers, who execute trades but do not offer individualized investing advice.

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Most online brokers are discount brokers, at least at their basic levels of service, in which trades are executed for free or for a small set-price commission. Many online brokers now offer premium-level services with higher fees.

Key Takeaways

  • A stockbroker or broker buys and sells stocks at the direction of clients.
  • Most buy and sell orders are now made through online discount brokers. This automated process reduces fees.
  • Wealthy individuals and institutions continue to use full-service brokers, who offer advice and portfolio management services as well as completing transactions.