Adopting an investment broker represents an important role when investing in the stock market, as these intermediaries will provide their clients with techniques and services that they can use to apply their operations, not to mention the risk of suffering scams by hiring a fake or bad reputation broker.
An investment broker refers to an intermediary within the stock market, which, as its definition indicates, fulfills a mediation role to complete the financial operations between a stock market seller and the buyer.
Initially, an investment broker could be hired through banks and securities companies that offered the service. However, thanks to the great advances in technology, this has remained in the past and can be hired through the internet, which is known as an electronic broker.
An investment broker has the ability to trade currencies, stocks, stock indices, commodities, CFDs, ETFs, and all financial assets traded on the stock exchange. Taking into consideration that, depending on the broker, you could invest with everyone, or with just a few specific categories.
Categories Of An Investment Broker
Although there are several types of brokers, it can be classified into two broad categories, which will allow to recognize the method used for its operations. These are:
The market markers, or also better known as market makers, are those brokers that make the latest generation platforms available for investors to trade. This type of broker commonly acts as a counterpart to all operations that are entered.
The ECN described in its acronym as Electronic Communications Network operates through electronic networks, taking prices published by multiple market participants, showing the best available rate for their position. One of the significant advantages of ECNs over others is that trade differentials are usually very low.
Thus, an investment broker is considered an intermediary between the operations of a seller and a buyer on the stock exchange through a commission. Therefore, it is crucial to hire a trusted broker, who has a license and regulatory system authorized to perform financial FBS broker review (รีวิวโบรกเกอร์ FBS, which is the term in Thai) operations, reducing the chances of fraud.