‘Broker’ is one of the most common terms used in stock market. But people are often confused about the role or duties and responsibilities of a ‘broker’. In short, it is a person or agent who carries out the task of handling and managing public’s orders to buy and sell shares, stocks, commodities or any other property. There are Full service brokers, too, who offer a complete range of investment services, studies and advice. Such a broker works on a commission basis more often. It is beneficial as it results in income according to the number of clients’ trades. On the other hand are ‘Discount brokers’ who do not indulge in giving advice and work in lieu of a fixed salary and undertake the job of trade executions and are generally paid less than Full Service brokers.
In short, ‘broker’ bridges the gap between the buyer and the seller. Broker may also act as the principal party to the deal if he is also the seller or buyer. People often term a brokerage or any brokerage firm as borker as it serves the same purpose. There are many types of brokers; mainly Business Broker, Commodity Broker, Insurance Broker, Investment Broker, Construction Equipment Broker, Mortgage Broker, Real Estate Broker, Ship Broker, Commodity Broker, Stock Broker and many more. Broker can also be termed as a personn who acts on behalf of others in contract purchase, sales in lieu of a fixed amount as fees or commission.
You can easily understand the term by the simple explanation like ‘broker’ is an individual or a firm that executes buy and sell orders in return of some monetary fees. A firm also acts as a broker when it acts as an agent for a customer for a fixed amount. It may be considered as a real estate person who is a representative of the seller of a property. His duties may include advertising for properties on sale and exhibiting the property to prospective customers, determining market values, and getting the clients with the most profitable offers. People often confuse the term ‘broker’ with other terms like go-between, interceder, intercessor, middleman, mediator, inter mediator and many other names. Brokers are all the most important as they help to establish trade connections in wide markets.