Stock Market Broker

A stockbroker is a licensed investor or trader who either works for a firm or on their own but can invest in the stock market for individual investors or corporations. Only members of the stock exchange can conduct transactions so even if you want to trade online you will still need a broker to handle your trades as individuals don't have access to the electronic markets. Your broker accesses the exchange network and the system finds a buyer or seller depending on your order.

In the US, stockbrokers must first take Series 7 and Series 63 exams in order to receive their stockbroker license. A beginning stockbroker must first learn the market, initially spending many hours on the phone building up their client base. Many expert brokers will expand upon the success of former customers so remember that credibility is key since stockbrokers often advise their clients on suitable investments.

One of the main functions stockbrokers provide is the ability to explain the workings of a stock exchange to clients. Once the client has a working knowledge of what to expect, the stockbroker can than collect information regarding their clients' needs and financial ability. An investment plan is drawn up and the stockbroker will put the order out on the floor of the securities exchange either by phone or by computer. Once a transaction is made, the buyer pays for the stock after which the broker performs the clearing and settlement procedures and transfers the stock title.

As a potential or beginning investor, it's important to first decide whether you want to use a discount stock market broker over a full-service broker. While discount brokers supply a minimal level of service they also allow you to make trading decisions online. As discussed above, full-service brokers will provide in-depth analysis if necessary as well advice with each trade but call for higher commissions and fees.

If you decide to go with a full service stock broker first schedule an initial meeting before committing to any one brokerage house. You should always know your broker personally before giving them your money. Since there are many different ways to invest in the stock market, find out what, exactly, your potential stock market broker specializes in. It's perfectly admissible to question each stockbroker about their different trading techniques and what they typically handle before selecting the right firm.