Broker
The firm that routes your orders to the market and holds your account.
Also called: brokerage · trading platform
In plain language
A broker sits between you and the exchange. They accept your orders, route them for execution, hold your cash and positions, and apply margin rules to your account.
Brokers differ in ways that directly change your results: commission structure, spread markup, execution quality, available order types, margin rates, and what happens to your position when you breach a margin requirement.
Every broker also imposes its own risk controls. Understanding when they will liquidate your position for you is part of understanding your own risk.
Why it matters
Your broker defines the real cost of every trade and the exact rules under which your position can be closed without your consent.
Common mistakes
- Comparing brokers on headline commission while ignoring spreads and financing costs.
- Not knowing the margin call and forced-liquidation policy until it is triggered.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The capital your broker requires you to post to open and hold a leveraged position.
A broker demand for more capital when account equity falls below the required minimum.
The gap between the bid and the ask — the built-in cost of entering a trade.
The instruction that says how long an order stays active before it expires.
A US regulatory designation for accounts making four or more day trades in five business days.