Definition of Brokers: Types and Understanding

Definition of Brokers

Know the Definition and Types of Brokers – Maybe if you are a trader forex or binary options trader then you will be familiar with the term broker. But this time we will discuss more clearly and in detail about what a “Broker” actually is. And what are the types and functions of Brokers.

Understanding Broker

Like the market, a broker is an intermediary that connects traders and buyers. Or more specifically, a broker is a company or individual who acts as an intermediary between a bank or a major producer with traders or consumers.

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Brokers have more experience and trading knowledge. For commercial transactions, especially those involving high value goods such as gold, silver, and important documents via the internet, it is safer to be supported by broker services. Because the broker will be fully responsible for the execution of orders for sales and purchases transactions made by investors.

Broker Type

1.Retail Broker

Retail brokers are also known as retail brokers. Retail brokers assist retail investors and receive commissions on each transaction according to customer instructions.

2. Full-service broker

Full-service brokers provide full services, such as providing analytical reports, providing information, executing investor transaction orders, and maintaining investor accounts. Full-service brokers are suitable for investors who do not have much skill in reading market situations or do not have free time to analyze the market. Because they provide full service, full-service brokers get high commissions from investors.

3. Deep discount broker

This type of broker offers the simplest services that only execute orders for sales or purchases and management of consumer accounts. Commissions for this type of broker are lower than for full service brokers.

4. Discount brokers

Discount brokers provide services in the form of executing buy or sell orders under customer direction and offering advice in the form of analytical reports or updated information. Investors who use discount brokerage services generally already have basic knowledge of the capital market and can read the data provided by the capital market. In terms of fees, discount brokers are below full-service brokers, but higher than deep discount brokers.

5. Online brokers

As the name implies, online brokers provide services via the internet. With the rapid development of information technology, brokers on line increasingly in demand by the public because the public can try equity transactions with a capital of only Rp. 100,000. Because it is processed via the internet, transactions can also be made anytime and anywhere. The commissions paid are also cheaper compared to conventional brokers.

So, those are some brief explanations about the meaning and types of brokers. For further and more information, you can find it on this website or

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