What is the role of a broker in security transactions? How are brokers compensated?
Brokers manage orders to sell or buy securities. Brokers are agents who deal on behalf of an investor. While investors call with an order, brokers do work on their behalf to find someone to take the other side of the anticipated trade. If investors desire to buy the brokers find sellers. If investors want to sell then brokers find buyers. Brokers are remunerated for their services when the person whom they represent, the investor pays them a commission on the purchase or sale of securities.