Who is the Stock Broker?

Who is the stock broker and what exactly is its role?

sheena Asked on September 29, 2015 in Investment.
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A stock broker is basically a qualified individual who is mainly involved in the trading of shares of the stock market. This person is a professional and usually regulated by the regulatory body to help investors with buying and selling their stocks. In most cases, the stock broker earns a commission from either one transaction which could be based on the volume of shares traded.

Who is the stock broker and what exactly is its role? In order to be eligible to trade shares on Bursa Malaysia, you will need to go through a broker who is registered with Bursa Malaysia. There are many brokerage companies in the country like Jupiter Securities, Inter-Pacific Securities, Credit Suisse Securities, TA Securities and others.Registered brokers are the only parties who have direct access to the stock exchange which means you must open an account with them before trading. You will not be able to deal directly on the share market individually.

The broker basically is like an agent like the ones who manages the sale of property. They rely very much on your trading where they earn a commission every time you buy or sell any shares. This means that the more you trade the more the broker will earn. Hence, you should only take their advice with a pinch of salt as there might be some broker who only wants you to trade regardless of whether it would be beneficial.

Before the adoption of online trading, brokers earn a lot more commission as you will need to call them each time you want to buy or sell any shares and they will advice you accordingly. This was where the brokers are more involved with your trading by monitoring the share price for you and then advising you appropriately.

This scenario has since changed tremendously with the use of technology where you open an account with the broker and then you will be given access to the trading activities using the internet. The responsibilities of monitoring your shares have now been handed back to the trader and you can buy and shares using the computer. Each transaction will still channel a small commission to the respective broker. However, traders could still practice the conventional way of buying and selling of shares by calling their brokers.

Source: http://biz.advertising.com.my/the-stock-broker.htm

haydenl Answered on September 29, 2015.
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