Trader Dealer Broker

Trader Dealer Broker responsibilities and implications

Suppose you want to buy 100 shares of PetroChina, and you do not have a horse to operate, then you are the trader.

in the Quote-driven market, deal are dealer billed, and they can be understood as opposites, and you want to buy at a low price, and they want to sell at a high price. They are most worried that you are more informed than they trader, so that you may be taken advantage of, thus adverse selection risk.

If the current market circulation of PetroChina only 50 shares, then your 100 shares even large, the market can not fully meet your needs, this time your horse broker has appeared, he on behalf of you everywhere ask who can sell PetroChina, this is the most basic service, If he does all the messy work for you acct, this is prime brokerage. Broker and you are a family.

Trader means a trader who does not act on his own behalf in a securities transaction; broker is the broker or middleman in securities, the one who pulls you into stock.

If you're a very frequent trader, you're trader. If you're a broker for your investors in the market, you are the broker, the so-called red vest in the country.

Trader is a contestant who is tasked with making money and executing orders; Dealer is a "market Maker" (remembering primarily on the New York Stock Exchange) with its own buyout stock, making waves between the buyer and the buyer. Broker is the "broker", generally do not buy their own inventory, for people to carry out transactions to earn hard money.

Broker can be translated into brokers, that is, ordinary clients entrust their own brokers, to buy and sell stocks. For example, if you want to buy IBM shares, you tell him that once the share price touches 50 yuan, he buys 10,000 shares, and he does so.

Dealer can be translated into a market-making business, like an intermediary, an intermediary between the two sides of the bargain. This concept is available in the stock market, the futures options market. A deal to have counter party, ordinary customer A to sell IBM shares in 50 yuan, if no one is willing to buy at this price, then the transaction will not be able to deal, the emergence of the market to make ordinary customer a transaction can be transacted. Then the market trader then sells IBM shares to ordinary customer B. The equivalent of adding liquidity to the market.

For example, in the OTC Market, we saw many airlines conducting oil hedging and forward contracts to buy options, when the airline was trading with investment banks, and the investment bank turned and (or at the same time) signed forward contracts with oil companies to hedge. (Investment banks in the process, hedging their own risk, locking in the cost of the profits), This time the investment bank is the role of dealer.

From for notes (Wiz)

Trader Dealer Broker