Who is a broker and how is he useful?

A broker is a professional intermediary between a buyer and a seller who brings them together and makes the transaction possible.

At the same time, in a specific transaction, the broker acts on behalf of and in favor of one party. If you want to buy something, your broker will find a seller for you and negotiate a transaction with him or his broker.

The broker charges a commission fee for his services. A person or a company may be such intermediary.

There are different brokers:

insurance, credit, leasing, aviation brokers, real estate brokers. One of the most common types, stock brokers, is interesting to us.

They are needed by everyone who wants to buy or sell securities. Because individuals and companies cannot come to the exchange and start trading without a special license. Only professional market participants can place orders.

Therefore, you definitely need to go through three steps to buy shares:

1. open an account with a broker,
2. top up it,
3. submit an order on the trading platform or through an investment advisor.

Only after that, the broker will take your money, allocate it on the stock exchange and find a seller by your order, with the required number of shares specified in the order at the required price. The broker will take a small commission fee to himself.

When you want to sell the shares, the process is the same. The broker will find a buyer on the stock exchange. Sell him shares on your behalf and credit your account with money. You will pay a small commission fee for this again.

All the operations described above are performed online on special trading platforms. Transactions take seconds.

Instruments

You can buy not only shares through the broker. The following instruments are also available:

• Bonds;
• Options;
• ETF;
• Mutual investment funds;
• Futures and currencies through some brokers.

Other functions

To attract investors, modern brokers act like full-fledged investment companies. In addition to access to trading, they also provide analytics, investment ideas, training, consulting, trust management products.

Choosing a Reliable Intermediary

The broker must be chosen carefully. Need to check:

• licenses;
• membership in exchanges;
• transparency and availability of financial statements;
• ratings;
• reviews.

Important to remember

Investment companies may make recommendations and assess the upside potential of securities. But no real broker can GUARANTEE you high regular income. If a company promises you tens or hundreds of percent guaranteed, they are probably scammers.

Broker and dealer - what's the difference?

A novice investor can often come across the term “dealer” along with the concept of “broker”.

The dealer is also involved in securities trading. But he makes transactions on his own behalf and for his money. The dealer performs market making simultaneously placing buy and sell orders. His income is a small difference between the prices of such orders.

Let's explain it easier: a currency exchange office can be considered the dealer. When an exchanger buys a dollar at 412 tenge and sells at 414 tenge, it acts like dealer. It catches the very difference, so-called "spread".

It turns out that in some transactions on the exchange, you will buy shares from other investors who sell through their broker. And in other transactions, the dealer can act as the seller.

Freedom Finance is a broker

Freedom Finance Investment company is the very stock broker. You can invest with us in the business of the largest companies on:

• Kazakhstan Stock Exchange (KASE);
• AIFC Stock Exchange (AIX);
• American stock exchanges NYSE, NASDAQ and AMEX;
• Russian stock exchanges MOEX and SPbEX;
• London Stock Exchange (LSE);
• Ukrainian Exchange (UEX);
• "Toshkent" Republican Stock Exchange (UZSE)
• and other markets.

We share high-quality analytics and profitable recommendations with customers for free. Freedom Finance analysts are at the top of the Bloomberg financial portal rankings. In 2020, the experts were awarded with the Best Research Firm in Central Asia award by the Global Banking and Finance Review.

For each customer, we assign a personal investment advisor who will help you figure it out. We also provide training courses for beginners and advanced investors.

In Kazakhstan, the company holds licenses from the National Bank of the Republic of Kazakhstan and the Astana International Financial Center.

Freedom Finance is an official member of KASE and most exchanges in seven countries of presence.

The company is part of the international group, Freedom Holding Corp. The holding is under a rigorous audit in accordance with American standards and is publicly reported to the US Securities and Exchange Commission.

Now you know who the broker is. Choose a reliable exchange partner and earn on the securities market!