Inside Look Broker Dealers

Broker dealers help clients gain wealth by trading in securities like bonds and stocks. Here are more facts about broker dealers from Kirk Duplessis, host of the Daily Call from Option Alpha podcast.

Brokers buy and sell securities for clients. Dealers do this for themselves. Therefore, a broker dealer does both jobs.

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You can find certified broker dealers in small firms, large firms, banks, or other stock-buying organizations. Broker dealers make money from commissions and from doing their own trades. They are regulated.

Brokerage firms are important for individual investors, since there is no way to buy stock without first getting an account with a brokerage firm. This is to make sure all stock buyers have enough money to play the investment game. Brokerage firms also act as crucial middlemen to make sure all trades are done correctly. They also are able to make accurate records of all trades.

Broker dealers are able to give advice to clients, but ultimately will do what the client wishes, even if they have advised the client to buy or not to buy certain stocks. One advantage of broker dealers over brokers is that they are often more financially stable, since they actively participate in the stock market.