What is the role of a broker in security transactions? How are brokers compensated?
Ans: Brokers handle orders to sell or buy securities. Brokers are agents who work in place of an investor. While investors call with an order, brokers work on their behalf to find out someone to take the other side of the proposed trade. If investors wish to buy, brokers find sellers. If investors wish to sell, brokers find buyers. Brokers are compensated for their services while the person whom they denote, the investor, pays them a commission on the sale or purchase of securities.