Broker and a dealer


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What is the difference between a Broker and a dealer

2 Answer(s)


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Broker facilitates the trading for its clients and in return earns commission and doesn't maintains inventory of financial instruments. On the other hand Dealer maintains the inventory of financial instruments and transact with traders by buying and selling the financial instruments.

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Broker will buy or sell a security on the client's behalf and charge a commission for the service.
Dealer buys or sells the security for itself, assuming actual ownership and, therefore, taking on more risk. Dealers might sell the security to a customer from its own inventory or it may buy a security for its proprietary account.