To participate in exchange trading in securities or foreign currency, intermediary structures are used through which direct access to the market is carried out. Such institutions are called brokerage companies, and those specialists who work in them are called brokers.
Who is a broker
A stock broker is a specialist in securities and other freely traded assets. In fact, he is an agent of his clients, representing them on the exchange and acting in their interests. Its main task is to buy and sell shares and other paper assets at the most favorable price for the client. The broker can also act as a consultant, providing the client with advice and guidance to help make a decision.
A client of a stock broker can be either an individual or a legal entity, with whom he has concluded a special agreement for the provision of intermediary services. Such an agreement prescribes the limits of the broker's liability and the actions that he has the right to perform in the interests of the client. The broker, in turn, is bound by an agreement with the exchange, which provides him with a job at one of its sites.
Stock broker functions
The main task of a broker is to be a good intermediary when making transactions on the exchange. He executes his client's orders, choosing the lowest price to buy assets, and sells securities at the highest possible price. Providing the best conditions for transactions, the broker also remembers his profit, because the size of his commission is usually directly related to the amount of profit received by the client.
On the exchange, the broker acts as a representative of the client, conducting operations and concluding transactions on his behalf and on his behalf. By using intermediary services, the client frees himself from many routine moments, without which exchange trading cannot do. All auxiliary operations, including laborious market analysis, are performed for the client by a qualified broker.
The broker is able to become a financial advisor for the client. Having knowledge in the field of exchange trading, having mastered the basics of fundamental and technical analysis, the broker can promptly suggest which trading strategy is best to follow at the moment. The intermediary bases his recommendations not only on knowledge of the general laws of the market, but also on the experience of working with securities.
The stock broker thus provides its client with asset management services. For a person who is not too sophisticated in stock trading, this means that he can not be distracted from his main activity, only periodically monitoring the activities of the intermediary and tracking the results of transactions. The broker is vitally interested in the success of his client, because his earnings and business reputation depend on the number of successful transactions.
