What is the Stock Market?

The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Such financial activities are conducted through institutionalized formal exchanges or over-the-counter (OTC) marketplaces which operate under a defined set of regulations. There can be multiple stock trading venues in a country or a region which allow transactions in stocks and other forms of securities.

What Is a Stockbroker?

A stockbroker is a professional trader who buys and sells shares on behalf of clients. The stockbroker may also be known as a registered representative or an investment advisor.

Most stockbrokers work for a brokerage firm and handle transactions for a number of individual and institutional customers. Stockbrokers are often paid on a commission basis although compensation methods vary by employer.

Key Takeaways

• A stockbroker or broker buys and sells stocks at the direction of clients.
• Most buy and sell orders are now made through online discount brokers. This automated process reduces fees.
• Wealthy individuals and institutions continue to use full-service brokers, who offer advice and portfolio management services as well as completing transactions.