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Encyclopedia > Brokerages

A Stock broker sells or buys stock on behalf of a customer. The stock broker works as an agent matching up stock buyers and sellers. A transaction on a stock exchange must be made between two members of the exchange — a typical person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker. Image File history File links Gnome-globe. ... The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange publicly held and listed under the symbol NYX on its own exchange. ...


In addition to actually trading stocks for their clients, stock brokers may also offer advice to their clients on which stocks, mutual funds, etc. to buy.

Contents

History

Philadelphia was the center of American finance during the first forty years of the new United States. In 1790, the country's first stock exchange was founded there and Chestnut Street was home to the nation's most powerful financial institutions. However, in the 1820s a shift to New York City began and for more than one hundred and fifty years Wall Street has been synonymous with the stock brokerage business. A number of firms rose to prominence over that time with the top-ranked brokerages in the early 1950s being: Nickname: City of Brotherly Love, Philly, the Cradle of Liberty, the City That Loves You Back, the Quaker City, The Birthplace of America Motto: Philadelphia maneto - Let brotherly love continue Location in Pennsylvania Coordinates: Country United States State Pennsylvania County Philadelphia Founded October 27, 1682 Incorporated October 25, 1701 Government... New York, NY redirects here. ... Elaborate marble facade of NYSE as seen from the intersection of Broad and Wall Streets For other uses, see Wall Street (disambiguation). ...

  1. Merrill Lynch & Co. Inc.
  2. E. F. Hutton & Co.
  3. Bache & Co.
  4. Paine Webber & Company
  5. Francis I. DuPont & Co.
  6. Dean Witter Co.
  7. Goldman Sachs
  8. Bear Stearns

Since the 1980s stockbroking firms have also been allowed to be market makers as long as the appropriate Chinese walls are put in place. Merrill Lynch & Co. ... E. F. Hutton & Co. ... Bache & Co. ... Paine Webber and Company was an American stock brokerage firm founded in 1880 in Boston, Massachusetts by William Albert Paine and Wallace G. Webber. ... Dean Witter Reynolds was an American stock brokerage catering to the middle class. ... Goldman Sachs offices at the Fraumünsterplatz in Zürich (the light-colored building on the left) The Goldman Sachs Group, Inc. ... The Bear Stearns Companies, Inc. ... A market maker is a person or a firm which quotes a buy and sell price in a financial instrument or commodity hoping to make a profit on the turn or the bid/offer spread. ... In business, Chinese Walls are information barriers implemented within firms to seperate and isolate persons who make investment decisions from persons who are privy to undisclosed material information which may influence those decisions. ...


With the advent of automated stockbroking systems on the Internet the client often has no personal contact with his/her stockbroking firm. The stockbroker's system performs all the stockbroking functions: it obtains the best price from the market and executes and settles the trade. Settlement (of securities) is the process whereby securities or interests in securities are delivered, usually against payment, to fulfill contractual obligations, such as those arising under securities trades. ...


Today, most of the once well-known corporate brand names including mid-sized firms such as Smith Barney have been swallowed up by global financial conglomerates. Discount brokers (such as E-Trade, Scottrade, and TD Ameritrade) have taken a large share of the business by offering highly discounted commissions, but the companies do not offer investment advice in return--all they do is execute orders. This article is about brands in marketing. ... Smith Barney is an American-based global stock brokerage and asset management services company owned by Citigroup. ... E*TRADE NYSE: ET is a financial services company. ... Scottrade is a privately owned discount retail brokerage firm headquartered in St. ... TD AMERITRADE Holding Corporation (NASDAQ: AMTD) is the owner of Ameritrade Inc. ...


Similar roles

Roles similar to that of a stock broker include investment advisor, financial advisor, and probably many others. A stockbroker may or may not be also an investment advisor, and vice versa. An investment advisor is an individual or firm that advises their client on investment matters on a professional basis. ... This page may meet Wikipedias criteria for speedy deletion. ...


The Certified Financial Planner designation initially offered by the American College in Pennsylvania is considered by many to be the next educational step a stock broker can take in order to be considered a legitimate and ethical financial consultant. The Certified Financial Planner (CFP) and certification marks are financial planning credentials awarded by the Certified Financial Planner Board of Standards Inc. ...


Tips for using a stock broker

Some people prefer to use and pay for the services of a broker because they feel more comfortable making decisions about their finances with the interactive guidance of a licensed professional.


When using a stock broker for financial guidance, one must be made aware that they do get paid on a commission, based on the stock/mutual fund they sell, and also through Class Distinction/Operating Expense Fees/Services Fees/Shareholder Fees. Thus, a conflict of interest arises concerning a stock broker who offers his/her service as a financial planner, because their revenue is generated as a direct result of your investment in the stock/mutual fund that they broker to you. Thus your return on investment may not be as great, and the advice they give you might not be in your best interest. However, some mutual funds and stocks can only be purchased through a broker: in such cases their services are required to purchase the financial instrument in question. For other uses, see Stock (disambiguation). ... A mutual fund is a form of collective investment that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... For other uses, see Stock (disambiguation). ... A mutual fund is a form of collective investment that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities. ... In finance, the return on investment (ROI) or just return is a calculation used to determine whether a proposed investment is wise, and how well it will repay the investor. ... Financial instruments package financial capital in readily tradeable forms - they do not exist outside the context of the financial markets. ...


A word of warning: If you receive a call offering you shares at what seems an unfeasibly good deal (e.g., an imminent IPO which will cause the price to 'go through the roof'), then you are probably being contacted by a boiler room. These are typically not registered with the FSA and could be in a foreign country where fraud laws are lax. If you suspect that you have been contacted in this way, see Boiler room for more information. An initial public offering (IPO) is the first sale of a corporations common shares to public investors. ... The term boiler room in business refers to a busy center of activity, often telemarketing or other types of sales. ... The Financial Services Authority (FSA) is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. ... The term boiler room in business refers to a busy center of activity, often telemarketing or other types of sales. ...


The pitch follows this pattern:

  1. Privileged information- this takes the form of a tip, insider knowledge he is not allowed to divulge of a big corporation going to invest in a minnow or in this case a takeover by a company he is allowed to mention.
  2. A good story related to a product in demand: oil, digital video etc.
  3. The need to get in early at a privileged price.
  4. He will hold the block of shares giving you time to research the company.
  5. There is a 12 month period when you are not allowed to sell.
  6. When he phones again he assumes you are going to buy, asks for your national insurance number to prove your identity and transfers you to administrator who takes details for a stock purchase application.

Acting as a principal

Stockbrokers also sometimes or exclusively trade on their own behalf, as a principal, speculating that a share or other financial instrument will increase or decline in price. In such cases the term broker makes little sense and the individuals or firms trading in a principal capacity sometimes call themselves dealers, stock traders or simply traders. For other uses, see Stock (disambiguation). ... Financial instruments package financial capital in readily tradeable forms - they do not exist outside the context of the financial markets. ... A stock trader or a stock investor is an individual or firm who buys and sells financial instruments (such as stocks or bonds) in the financial markets. ...


Transactions by stock brokers in the US and UK

In the US: When acting as an agent, the stockbroker typically charges the client a flat fee and/or a percentage-based commission for undertaking the trade, and the price quoted the client must be the best price available in the market. When acting as a principal, the trade could be with another market participant or one of the stockbroker's clients. When trading in a principal capacity with a client, the broker informs the client and charges the client a markup or markdown from the prevailing market price. The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. ...


In the UK: Stock brokers act the same in the UK as in the US, except that when trading in a principal capacity with a client, the broker is obliged to inform the client and no commission is charged.


Other jurisdictions are thought to have similar rules.


Brokerage terms

Front office: This is a description of the part of a brokerage firm that is "client facing". The sales staff, brokers and traders are part of the front office. Functions of the front office include acquisition and entry of orders, fulfillment of the orders, and all the regulatory reporting for the orders. Front office is an integrated CRM software. ...


Back office: The back office is where the clearance processing of the trades is done. Transfer of securities and money and the tracking of "failure to deliver" is handled. Securities lending for a brokerage firm, wherein shares of a security that is being sold short are located to ensure they can be delivered, is usually included in the back office as well. A back office is a part of most corporations where tasks dedicated to running the company itself take place. ...

Prime Brokerage is a service sold by investment banks to hedge funds. ... A retail broker is a brokerage firm that caters to the average investor or, in other words, the retail sector of investors - as opposed to the institutional sector of investors. ... A low cost brokerage can be considered to be a special case of a discount brokerage which functions in a similar way to a dividend reinvestment program. ...

Famous stock brokers

Buster Crabbe Buster Crabbe (February 7, 1908 – April 23, 1983) was an American athlete turned actor, who starred in a number of popular serials in the 1930s and 1940s. ... The five Olympic rings were designed in 1913, adopted in 1914 and debuted at the Games at Antwerp, 1920. ... Film is a term that encompasses individual motion pictures, the field of film as an art form, and the motion picture industry. ... Brian Dennehy in Death of a Salesman Brian Dennehy parodied in South Park: Bigger, Longer & Uncut Brian Dennehy (born July 9, 1938 in Bridgeport, Connecticut, USA) is an Irish-American actor who has appeared in movies, television shows, and stage productions. ... Martha Stewart (born Martha Helen Kostyra on August 3, 1941) is an American business magnate, author, editor and homemaking advocate and was convicted of felony charges related to insider trading. ... Edward Francis Hutton (September 7, 1875, New York City - July 11, 1962, Westbury, Long Island, New York) was an American financier and co-founder of E. F. Hutton & Co. ... Majorie Merriwweather Post ca. ... Dina Merrill on Life magazine January 11, 1960 Nedenia Marjorie Hutton (born December 9, 1925) is an American actress known as Dina Merrill. ... Cliff Robertson. ... Michael Robert Milken (born July 4, 1946 in Encino, California) is an American financier who was highly influential in developing the market for junk bonds (a. ... Drexel Burnham Lambert was one of the most profitable Wall Street investment banking firms during the late 1970s and most of the 1980s. ... George Murphy George Lloyd Murphy (July 4, 1902 – May 3, 1992) was an American dancer, actor, and politician. ... A silent film is a film which has no accompanying soundtrack. ... A sound film (or talkie) is a motion picture with synchronized sound, as opposed to a silent movie. ... Elaborate marble facade of NYSE as seen from the intersection of Broad and Wall Streets For other uses, see Wall Street (disambiguation). ... William A. Paine William Albert Paine (January 29, 1855 - September 24. ... Paine Webber and Company was an American stock brokerage firm founded in 1880 in Boston, Massachusetts by William Albert Paine and Wallace G. Webber. ... Hemish Shah was an English professional poker player, and the winner of Late Night Poker series 4, where he beat the season 2 champion Simon Aces Trumper in the final heads-up confrontation. ... Motto (French) God and my right Anthem God Save the King (Queen) England() – on the European continent() – in the United Kingdom() Capital (and largest city) London (de facto) Official languages English (de facto) Government Constitutional monarchy  -  Queen Queen Elizabeth II  -  Prime Minister Tony Blair MP Unification  -  by Athelstan 967  Area... The WSOP logo The World Series of Poker is the most prestigious set of poker tournaments in the world. ... Martha Stewart (born Martha Helen Kostyra on August 3, 1941) is an American business magnate, author, editor and homemaking advocate and was convicted of felony charges related to insider trading. ... Christopher Gardner Christopher Gardner (born February 9, 1954 in Louisiana) is a self-made millionaire and entrepreneur. ...

See also


  Results from FactBites:
 
NatCity Investments, Inc. offers investment services you need - Wealth - National City Corporation (173 words)
NatCity Investments, Inc. is the full-service brokerage and advisory subsidiary of National City Corporation.
The convenience of full-service checking and brokerage capabilities in one account.
Brokerage products and services are offered through NatCity Investments, Inc., a registered broker dealer, member NASD and SIPC, and subsidiary of National City Corporation.
Brokerage clerks (602 words)
Brokerage clerks perform a number of different jobs with wide-ranging responsibilities; all involve computing and recording data pertaining to securities transactions.
Brokerage clerks in the operations areas of securities firms perform many duties to facilitate the sale and purchase of stocks, bonds, commodities, and other kinds of investments.
Employment of brokerage clerks is expected to decline through the year 2012, as technological advancements continue to automate many of their job duties.
  More results at FactBites »

 
 

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