Brokers are the bridge between buyers and sellers of any security or asset such as a stock or a home. They typically work on commission, so it is important to know if and how they work for the buyer and seller.
Frequently Asked Questions
  • What are the best trading platforms and brokerage accounts for beginners?

    Choosing the right brokerage account can be daunting but the best trading platforms have a lot of tools to help new investors learn about investing and trading to begin your investing journey. Clear and concise content on trading platforms and mobile apps are some key features to consider. The best platforms also have a good mix of beginner and experienced trading instructions, low fees and account minimums, customized portfolio management tools and strong educational content and investing calendars, along with multiple ways to reach customer service.

  • What is a trailing commission?

    A trailing commission is simply a fee that you pay a financial advisor each year that you own an investment, which gives the advisor a financial incentive to do a thorough review of an investor's portfolio and provide guidance.

  • What are soft commissions?

    Soft commissions are ways that customers of financial firms can pay for their services through commission revenue instead of vial direct payment. Soft commissions are also known as soft dollars, and the practice can be seen as unethical or unfair. One example would be a mutual fund receiving research and advising services in return for sending order flow through a brokerage desk.

  • Can you sue your broker?

    Losing money on one’s investment can often lead to lots of blame to go around, and one may be tempted to sue a broker or other parties that may have been involved in some investment decisions. While suing for damages for bad investments or mismanagement of funds may be an option, the decision to file a lawsuit can be a long and costly process.

  • Do financial advisors get paid by mutual funds?

    Financial advisors build financial plans for their clients, including goals for investments, budget, insurance, and savings, and for that service advisors are reimbursed by mutual funds for those advisory services. Advisors can advise their clients toward certain investments and may execute trades in the financial markets by proxy for their clients.

    Advisors who are also brokers get paid commissions by a mutual fund.

  • What is a cross?

    A cross is a financial term that can have several meanings. The most common reference of a cross is when a broker executes a transaction on a trading floor or exchange. In foreign exchange markets, a cross trade involves two non-U.S. dollar currency exchange transactions. In technical analysis, golden crosses and death crosses are commonly identified chart patterns that may occur.

Key Terms

Explore Brokers

Best for
Best Online Brokers for Low Costs
Best for
Best Investment Apps
Two older men taking a photo together
Best Roth IRA Accounts of 2022
Best for
Best Brokers for International Trading
Best Brokers
Investopedia’s Online Broker Review Methodology
best for image
Best Brokers for Penny Stocks
Best for
Best Online Brokers for Options Trading
Charles 'Chuck' Schwab
Chuck Schwab on Zero Commissions
Considering factors other than commissions
Online Broker Battlefield Shifts from Costs to Execution Quality
Best for
Best IRA Accounts
Placing a trade
Who Wins a Brokerage Price War?
Vanguard vs Fidelity
Vanguard vs. Fidelity Investments
How Brokerage Firms Work
Charles Schwab vs Vanguard
Charles Schwab vs. Vanguard
Questrade Review
Best for
Best Brokers for ETFs
How Long Does It Take for Brokers to Confirm a Trade?
Understanding Brokerage Fees
What Is Front-Running in Stocks?
A broker working on three computers.
Understanding the Nuances of Give-Up Brokered Trades
Line Chart
Order Management System (OMS)
How a Broker Can Avoid a Market-Maker's Tricks
TradeStation vs. Interactive Brokers
Robinhood vs. Vanguard
Vanguard vs. TD Ameritrade
Charles Schwab vs. Fidelity Investments
Charles Schwab vs. TD Ameritrade
T.Rowe Price vs Vanguard
T. Rowe Price vs. Vanguard
Fidelity Investments vs. TD Ameritrade
A financial statement with glasses and calculator on the desk.
This Is How a Typical Securities Firm Works
E*TRADE vs. Fidelity Investments
Fidelity Investments vs. T. Rowe Price
Merrill Edge vs Vanguard
Merrill Edge vs. Vanguard
Interactive Brokers vs. TD Ameritrade
Robinhood vs. E*TRADE
Charles Schwab vs. E*TRADE
E*TRADE vs. TD Ameritrade
Form T Definition
Interactive Brokers vs E*TRADE
Interactive Brokers vs. E*TRADE
Lightspeed vs. Interactive Brokers
NinjaTrader Review
Scottrade Center exterior, 2012
What Happened to Scottrade?
Full-Service Brokerage or DIY Investing?
Charles Schwab office building in SOMA district.
5 Brokers That Pay You to Open an Account
5 Truths About Discount Brokers
A shot of a young couple consulting a financial advisor.
Why Brokers Ask for Your Personal Information
How Brokerage Fees Work
How a Buttonwood Agreement Works
American Code for Information Interchange (ASCII)
What is a margin account?
A man works at a laptop and reviews stock charts from an online broker.
Registered Representative (RR)
Scrap Mountain. Rough scrap, cubed metal and metal swarf ready for loading onto a bulk carrier at Liverpool Alexandra Branch Dock, Liverpool, 19.03.11.
What Is COMEX?
Stock broker on the phone looking at a computer screen with financial information
What Is a Call Loan Rate?
Investor analyzing stock market investments with financial dashboard, business intelligence (BI), and key performance indicators (KPI) on smartphone and computer screens
What Is a Dealer Market?
Business People Shaking Hands, Finishing up a Papers Signing
Initial vs. Maintenance Margin for a Futures Contract: What's the Difference?
The index of gasoline down
National Commodity and Derivatives Exchange (NCDEX)
Two people signing a contract
Stock Brokers vs. Underwriters: What's the Difference?
manhattan office building from below
Coffee, Sugar and Cocoa Exchange (CSCE) Definition
Financial broker talking with a client
Do You Dare Sue Your Broker?
A midsection of businessman using technologies in office with data and charts.
Daily Average Revenue Trades (DARTs)