AuthorTopic: Whats the difference between a Broker and dealer
@2016-08-15 20:16:17
Hi All,

Can anyone explain me the difference between a broker and dealer?
If an agent places an order for multiple firms like Morgan Stanley, Merril and goldman, for their firm accounts(not for their customers), will he be called a dealer or a broker of these firms.

Is it that a dealer places order only for his own firm account(of which he is an employee) and called a broker if he places order for his firm's customers or for other firms and their customers?.
@2016-08-17 13:36:17
a broker facilitates a transaction between a buyer and seller, either finding a buyer for the seller or a seller for the buyer, essentialy he has no financial interest in the issue other than a commission.

a dealer actually takes inventory in the particular issue being sold (equity, real estate, bonds, etc), and can experience a gain (or loss) depending on what the market value of the issue is when sold (or bought), dealers have a financial interest, brokers do not.

hope this helps...

CFA Discussion Topic: Whats the difference between a Broker and dealer

To post a new topic or reply to a topic, please log in or register for a free user account.

I used your notes and passed ... highly recommended!