There are a lot of different players in any transaction. The process of buying and selling securities often involves more than just a buyer and a seller. There can be many parties working behind the scenes.
Once you set up and fund a brokerage account, it is very easy to call your broker or place an order online. Within seconds your order is confirmed. However, the actual execution is a lot more complex.
Your broker is most likely working with a clearing broker, who plays an important role to ensure the trade is settled correctly and that the proper records are kept. Your broker will send your cash and securities to a clearing broker to clear the trade. The clearing broker then works with a clearing corporation that matches and settles trades and handles the confirmation and delivery of the transactions.
One of the main jobs of a clearing broker is to confirm all the information given regarding the trade is correct. But their most important role is to manage the funds involved for each transaction. They maintain custody of the investor’s securities and other assets such as cash in the account. Since only about 5% of retail brokerage firms are self-clearing, most work with a clearing broker.
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Finance: What is a Floor Broker v. Floor...13 Views
Finance allah shmoop What is ah floor broker versus a
floor trader All right Well here's a floor fixer and
here's a floor broker but okay Shocking a floor broker
Brokers stocks on the floor of a stock exchange Right
Well here's the new york stock exchange here's its floor
These guys down here they're floor brokers That is they're
trading stocks and other securities on behalf of their clients
Basically this is the scene from trading places with eddie
murphy Great old film Old rich white guys in a
building up here Call down to their guys on the
floor who execute their bidding All right well it's a
bunch of brokers all trading their clients stocks right here
and here And here and here and here all over
the world within among each other So that money is
well pushed around thoroughly like that Cato's in grandma's hash
browns recipe Note that a floor broker is different from
a floor trader Who although he or she works on
the floor of an exchange also makes trades as a
principal for his or her own account So yeah that's
floor broker No jackhammer required Thank you very much Go
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