What is a Broker?
A broker is a person or a brokerage firm that matches investors who want to buy or sell securities (like stocks or bonds) with the other side of their transactions.
🤔 Understanding a broker
Brokers are the most common intermediary that investors rely on to trade various assets. To trade stocks, brokers must be licensed (i.e., registered with the US Securities Exchange Commission and the Financial Industry Regulatory Authority) to pair people who want to buy or sell a security with the other side of the transaction. Although it’s becoming less common, some brokers generate revenue by charging a fee (aka a commission), for each transaction.
There are dozens of brokerage firms in the US. You’ve got Robinhood (of course) as well as others like Charles Schwab, E* Trade, and Fidelity, which vary in terms of services offered and fees charged.
Takeaway
Online brokers are like professional matchmakers...
They offer a fast and efficient way to place trades and connect with people on the other side of a transaction. They’re registered firms (and representatives) that link investors who want to buy or sell stocks, bonds, and other securities with the parties on the other side of the transactions. Some OG firms charge a commission for the service.
New customers need to sign up, get approved, and link their bank account. The cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at rbnhd.co/freestock. Securities trading is offered through Robinhood Financial LLC.
