Online Broker
A Stock broker sells or buys stock on behalf of a customer. The stock broker works as an agent matching up stock buyers and sellers. A transaction on a stock exchange must be made between two members of the exchange — a typical person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker.
In addition to actually trading stocks for their clients, stock brokers may also offer advice to their clients on which stocks, mutual funds, etc. to buy.
Transactions by stock brokers in the US and UK
In the US: When acting as an agent, the stockbroker typically charges the client a flat fee and/or a percentage-based commission for undertaking the trade, and the price quoted the client must be the best price available in the market. When acting as a principal, the trade could be with another market participant or one of the stockbroker's clients. When trading in a principal capacity with a client, the broker informs the client and charges the client a markup or markdown from the prevailing market price.
In the UK: Stock brokers act the same in the UK as in the US, except that when trading in a principal capacity with a client, the broker is obliged to inform the client and no commission is charged.
Other jurisdictions are thought to have similar rules.
[edit] Brokerage terms
Front office: This is a description of the part of a brokerage firm that is "client facing". The sales staff, brokers and traders are part of the front office. Functions of the front office include acquisition and entry of orders, fulfillment of the orders, and all the regulatory reporting for the orders.
Back office: The back office is where the clearance processing of the trades is done. Transfer of securities and money and the tracking of "failure to deliver" is handled. Securities lending for a brokerage firm, wherein shares of a security that is being sold short are located to ensure they can be delivered, is usually included in the back office as well.
* Prime brokerage
* Retail broker
* Low cost broker
[edit] Famous stock brokers
* Larry "Buster" Crabbe - Actor and former Olympic swimmer, Crabbe became a stockbroker and businessman after a career in film.
* Brian Dennehy - An actor, Dennehy worked as a broker for a time at the same firm as Martha Stewart.
* Edward Francis Hutton - Founder of the firm known for its slogan: "When E. F. Hutton talks, people listen." In the late '20s and early '30s, Hutton was married to cereal heiress Marjorie Merriweather Post. Hutton's daughter with Post was actress Dina Merrill, the one-time wife of actor Cliff Robertson. Hutton's namesake firm imploded into bankruptcy in the 1970s.
* Michael Milken - The financier came to fame at Drexel Burnham Lambert in the 1980s.
* George Murphy - Silent film and early talkies star Murphy worked for a time as a Wall Street runner.
* William A. Paine - co-founder of Paine Webber.
* Hemish Shah - Late English poker player, who left stocks for poker, going on to win a World Series of Poker bracelet.
* Martha Stewart - After she gave up modeling in the late 60s, Stewart worked as a broker on Wall Street for 7-8 years before launching her lifestyle business.
* Christopher Gardner - A man who grew from homelessness to being a multi-millionaire by stock broking.
In addition to actually trading stocks for their clients, stock brokers may also offer advice to their clients on which stocks, mutual funds, etc. to buy.
Transactions by stock brokers in the US and UK
In the US: When acting as an agent, the stockbroker typically charges the client a flat fee and/or a percentage-based commission for undertaking the trade, and the price quoted the client must be the best price available in the market. When acting as a principal, the trade could be with another market participant or one of the stockbroker's clients. When trading in a principal capacity with a client, the broker informs the client and charges the client a markup or markdown from the prevailing market price.
In the UK: Stock brokers act the same in the UK as in the US, except that when trading in a principal capacity with a client, the broker is obliged to inform the client and no commission is charged.
Other jurisdictions are thought to have similar rules.
[edit] Brokerage terms
Front office: This is a description of the part of a brokerage firm that is "client facing". The sales staff, brokers and traders are part of the front office. Functions of the front office include acquisition and entry of orders, fulfillment of the orders, and all the regulatory reporting for the orders.
Back office: The back office is where the clearance processing of the trades is done. Transfer of securities and money and the tracking of "failure to deliver" is handled. Securities lending for a brokerage firm, wherein shares of a security that is being sold short are located to ensure they can be delivered, is usually included in the back office as well.
* Prime brokerage
* Retail broker
* Low cost broker
[edit] Famous stock brokers
* Larry "Buster" Crabbe - Actor and former Olympic swimmer, Crabbe became a stockbroker and businessman after a career in film.
* Brian Dennehy - An actor, Dennehy worked as a broker for a time at the same firm as Martha Stewart.
* Edward Francis Hutton - Founder of the firm known for its slogan: "When E. F. Hutton talks, people listen." In the late '20s and early '30s, Hutton was married to cereal heiress Marjorie Merriweather Post. Hutton's daughter with Post was actress Dina Merrill, the one-time wife of actor Cliff Robertson. Hutton's namesake firm imploded into bankruptcy in the 1970s.
* Michael Milken - The financier came to fame at Drexel Burnham Lambert in the 1980s.
* George Murphy - Silent film and early talkies star Murphy worked for a time as a Wall Street runner.
* William A. Paine - co-founder of Paine Webber.
* Hemish Shah - Late English poker player, who left stocks for poker, going on to win a World Series of Poker bracelet.
* Martha Stewart - After she gave up modeling in the late 60s, Stewart worked as a broker on Wall Street for 7-8 years before launching her lifestyle business.
* Christopher Gardner - A man who grew from homelessness to being a multi-millionaire by stock broking.
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