What is a Stock Broker?

Reed Floren

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Are you wondering what a stock broker is and what they do? Here’s your answer.

A stock broker is a person or a firm that trades on its clients behalf, you tell them what you want to invest in and they will issue the buy or sell order. Some stock brokers also give out financial advice that you a charged for.

It wasn’t too long ago and investing was very expensive because you had to go through a full service broker which would give you advice on what to do and would charge you a hefty fee for it. Now there are a plethora of discount stock brokers such as Scottrade http://www.scottrade.com now you can trade stocks for a low fee such as $7 total.

I can think of three different types of stock brokers.

1. Full Service Broker - A full-service broker can provide a bunch of services such as investment research advice, tax planning and retirement planning.
2. Discount Broker – A discount broker let’s you buy and sell stocks at a low rate but doesn’t provide any investment advice.
3. Direct-Access Broker- A direct access broker lets you trade directly with the electronic communication networks (ECN’s) so you can trade faster. Active traders such as day traders tend to use Direct Access Brokers

So as you can tell there a few options for a stock broker and you really need to pick which one suits you needs.

Reed Floren runs a stock market forum where you can find answers to all your stock market questions register for your free membership at this stock market forum http://www.reedfloren.com/forums/index.php?act=Reg&CODE=00


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