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What is Broker?

Also known as: makléř online broker stockbroker

Quick Answer

A broker is a licensed intermediary that executes buy and sell orders for financial instruments on behalf of clients.

🤖 LARRY'S TAKE

" A broker is the middleman between you and the market. They used to charge you $25 per trade for the privilege. Now many are 'free' — which means you're probably the product. Whether they make money on your order flow, currency conversion, or just hoping you trade more often, someone is always getting paid. It's just not always obvious who. "

BORING DEFINITION

A broker is a licensed intermediary that executes buy and sell orders for financial instruments on behalf of clients. In investing, an online broker is the platform through which individuals access stock markets, buy shares, ETFs, and other securities. Modern online brokers have democratized investing by offering low or zero-commission trading.

How Does Broker Work?

A broker receives your order, routes it to a stock exchange or alternative trading venue, and confirms execution. They must be licensed and regulated. Online brokers make money through spreads, currency conversion fees, margin interest, or payment for order flow. Regulation varies by country.

Why it matters: Without a broker, retail investors can't directly access stock exchanges. Choosing the right broker affects your costs, available markets, security of funds, and the quality of trade execution.

REAL WORLD EXAMPLE

> Tomáš wants to buy shares of AMD. He opens an account with an online broker, deposits funds, searches for AMD, and places a buy order. The broker executes the trade on the stock exchange on his behalf.

Frequently Asked Questions About Broker

What is a broker in investing? +
A broker is a licensed intermediary that executes buy and sell orders for stocks, ETFs, and other financial instruments on your behalf. Modern online brokers provide a platform where you can open an account, deposit funds, and trade securities on global stock exchanges.
How do online brokers make money if trading is free? +
Even 'zero commission' brokers have revenue streams: payment for order flow (routing your trades to market makers who pay for it), currency conversion fees, spread on prices, margin interest, and premium subscriptions. Free trading is rarely truly free — it's a business model shift, not charity.
What online brokers are available in the Czech Republic? +
Czech investors have access to several regulated online brokers including XTB (regulated by the Czech National Bank), Trading 212 (FCA regulated), and DEGIRO (AFM regulated). This is informational only — not a ranking or recommendation. Always research fees, regulation, and features before choosing.
What is the difference between a broker and a bank? +
Banks can offer investment products but are primarily focused on deposits, loans, and payments. Brokers are specialized in trading securities — they typically offer wider market access, better trading tools, and lower fees for investing. Some banks have brokerage divisions.
Is my money safe with an online broker? +
Regulated brokers must keep client funds separate from their own (segregated accounts) and are often covered by investor compensation schemes. In the EU, the Investor Compensation Scheme covers up to €20,000 per client per firm. Regulatory oversight varies — always verify a broker's license before depositing.
What should I look for when choosing a broker? +
Key factors: regulatory status (is it licensed in your jurisdiction?), fee structure (commissions, spreads, currency conversion), available markets, platform quality, and customer support. This page provides information only — not advice on which broker to choose.

📊 Today's Candidates for Broker

RIOT
-7.58%
INTC
-4.5%
PLTR
-3.85%

Click a symbol for live data. Financial advice? No way.

📚 FROM THE ACADEMY

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