TRADING & INVESTING TERMS
A broker is a licensed person or an organization that acts as a middleman between a trader and stock exchange. Orders are only accepted from the members of the exchange who are usually licensed brokers and registered companies. Individual traders and investors require the services from stock exchange members for their trade execution. Brokers generally take commissions based on investments or sometimes they charge a fixed fee. For certain types of securities (e.g., Forex), brokers charge a spread (a small premium in the purchase and sell prices) instead of a commission or fixed fee. Brokers may also charge an interest for overnight holding of a position, which has margin or leverage.
There are different kinds of brokers but the key types are-:
There are various parameters, which affects the selection of a right broker. The type of broker varies based on the need of the Trader. Some of the key parameters to consider are: