Broker-Dealers and Market Makers

Broker-dealers and market makers connect investors to markets, supply liquidity, and handle execution workflows.

This branch now separates client brokerage roles, dealer and market-making functions, exchange membership status, and broader market-intermediary pages.

In this section

• Brokerage, Client Access, and Fees
  Market-structure terms for brokers, brokerage accounts, brokerage firms, brokerage fees, commissions, stockbrokers, and registered representatives.
  • Broker Types and Client Representatives
    Broker, floor broker, registered representative, stockbroker, and traditional broker-dealer terms used in client access.
    • Broker
      An agent who brings two parties together, enabling them to enter into a contract to which the broker is not a principal. The broker's remuneration consists of a brokerage, often calculated as a percentage of the contract sum but may also be fixed. Brokers are used for their specialized market knowledge or to conceal the identity of a principal.
    • Floor Broker: Exchange Member Role
      A floor broker is an exchange member who executes orders to buy or sell securities on the exchange floor.
    • Registered Representative: A Securities Salesperson Registered with the SEC
      A comprehensive overview of a Registered Representative, detailing their role, registration process, responsibilities, and significance in the financial markets.
    • Stockbroker: Role and Importance in Financial Markets
      An agent who buys and sells securities on a stock exchange on behalf of clients, providing investment advice and receiving a commission for their services.
    • Traditional Broker-Dealers: Financial Intermediaries for Trading Securities
      Discover the role of traditional broker-dealers in the financial market, their operational mechanisms, historical context, and comparison with modern trading systems.
  • Brokerage Accounts, Fees, and Firms
    Brokerage account, brokerage firm, commission, fee, and bank-or-broker-dealer terms used in brokerage relationships.
    • Banks or broker-dealers: Facilitation in Treasury Securities Purchase
      Banks or broker-dealers play a pivotal role in facilitating the purchase of Treasury securities, charging service fees unlike TreasuryDirect. This definition explores their function, fees, and contrasts with TreasuryDirect.
    • Brokerage Account: An Account for Trading Securities
      A comprehensive definition and explanation of a brokerage account, its types, key features, and its role in the financial market.
    • Brokerage Fee: Understanding Types and How They Work
      A comprehensive guide on brokerage fees, detailing how they work, the various types, and their impact on financial transactions.
    • Brokerage Firm: Facilitating Securities Trading
      A comprehensive guide on Brokerage Firms, their definitions, roles, types, historical context, and related terms.
    • Commission: A Comprehensive Overview
      An in-depth exploration of commissions, including their historical context, types, key events, explanations, formulas, charts, importance, applicability, examples, considerations, related terms, comparisons, interesting facts, inspirational stories, famous quotes, proverbs and clichés, expressions, jargon, slang, FAQs, references, and a summary.
• Dealer, Market-Making, and Trading Desk Roles
  Market-structure terms for broker-dealers, dealers, designated market makers, market making, dealing desks, and trading floors.
  • Broker-Dealers and Market Makers
    Broker-dealer, dealer exchange, designated market maker, market maker, and stockjobber terms used in dealer markets.
    • Broker-Dealer
      A comprehensive guide to understanding broker-dealers (B-D), their roles, how they operate, and the regulations governing them in the U.S. securities market.
    • Dealer Exchange: A Modern Marketplace for Securities
      A comprehensive examination of dealer exchanges, highlighting their structure, functioning, historical context, and related terms.
    • Designated Market Maker (DMM): A Trader Responsible for Maintaining Order and Fairness in the Marketplace
      A comprehensive look into the role and responsibilities of Designated Market Makers (DMMs) in financial markets, including their functions, historical context, and their impact on trading.
    • Market Maker
      Dealer or liquidity provider that quotes buy and sell prices and helps keep markets tradable.
    • Market Making: Providing Liquidity to the Markets
      Market Making involves providing liquidity to financial markets by being ready to buy or sell at quoted prices. This comprehensive article explores the historical context, types, key events, mathematical models, and importance of market making in the financial system.
    • Stockjobber: Historical Role in Financial Markets
      Exploring the historical context, functions, and evolution of stockjobbers in financial markets.
  • Desks, Floors, and Discount Houses
    Dealing desk, trading desk, trading floor, and discount house terms used in market-intermediary operations.
    • Dealing Desk
      A detailed examination of how some brokers use a dealing desk to process orders internally, rather than routing them directly to the market.
    • Discount House
      A detailed overview of Discount Houses, their history, functioning, importance, and relevance in financial markets.
    • Trading Desk
      A comprehensive overview of trading desks, including their definition, primary functions, and the various types that exist within financial institutions.
    • Trading Floor
      The physical location where securities transactions are conducted
• Exchange Membership and Firm Status
  Market-structure terms for exchange seats, member firms, and nonmember firms.
  • Member Firm: Brokerage Affiliation with Stock Exchange
    A comprehensive examination of a Member Firm, a brokerage firm holding membership on a major stock exchange through an employee's name, its implications, historical context, and related terms.
  • Nonmember Firm: Brokerage Firm Not A Member of An Organized Exchange
    A brokerage firm that is not a member of an organized exchange and executes trades through member firms, regional exchanges, or in the third market.
  • SEAT: Membership on a Securities or Commodities Exchange
    A detailed exploration of the term 'SEAT,' referring to membership on a securities or commodities exchange, typically bought and sold at market-driven prices.
• Market Intermediaries
  Market-structure terms for intermediaries, information intermediaries, advisers, liquidity providers, and market-access agents.
  • Commission-Based Advising: Advisors Earn Income from Product Sales Commissions
    A detailed overview of commission-based advising, where advisors earn income from the sales of financial products.
  • Hedge Fund Manager: Roles, Strategies, and Compensation Models
    An in-depth exploration of hedge fund managers, their responsibilities, investment strategies, and the compensation structures used in the hedge fund industry.
  • Information Intermediaries
    Information intermediaries are individuals or groups who obtain, analyze, and interpret information, communicating their findings to others. This article provides a comprehensive overview, including historical context, types, key events, mathematical models, charts, and their importance.
  • Intermediary: A Comprehensive Overview
    An intermediary serves as a go-between in various contexts, including finance, where they make investment decisions for others. Examples include banks, insurance companies, and brokerage firms.
  • Liquidity Provider: Ensuring Market Liquidity
    A comprehensive look at Liquidity Providers, their role in financial markets, types, and examples.
  • Registered Investment Adviser (RIA): A Comprehensive Guide
    A professional individual or firm registered with the SEC or state securities authorities that provides investment advice for a fee.