brokers

Examples of brokers in the following topics:

• Purchase Process

  • Most individuals purchase bonds via a broker or through bond funds.
  • Most individuals who want to own bonds purchase bonds via a broker or do so through bond funds.
  • Buying a bond involves setting up an account with a broker and requesting that the broker buy bonds on the buyer's behalf.
  • Brokers also can furnish considerable market information regarding prices, products, and market conditions.
  • Additionally, bonds can be purchased directly from the U.S. federal government without the use of a broker and without paying broker commission fees.

• Merchant Wholesalers

  • Wholesale merchants, agents, and brokers help move goods between producers and retailers.
  • Wholesale merchants, agents, and brokers are essential elements of the wholesale business.
  • Agent merchants represent their the buyer or seller, usually on a permanent basis; brokers bring parties together on a temporary basis.
  • Brokers have the tools and resources to reach the largest possible base of buyers.
  • An individual producer, on the other hand, especially one new in the market, probably will not have the same access to customers as a broker.

• Securities Exchange Act of 1934

  • It regulates stock exchanges, brokers, dealers, and even private traders.
  • The '34 Act also regulates broker-dealers without a status for trading securities.
  • Previously these brokers would find stock prices through newspaper printings and conduct trades verbally by telephone.
  • Today, a digital information network connects these brokers.
  • In the last 30 years, brokers have created two additional systems for trading securities.

• Types of Market Organizations

  • There are three main types of market organization that facilitate trading of securities: auction market, brokered market, and dealer market.
  • Most bonds and structured products trade "over the counter," or by phoning the bond desk of one's broker-dealer.
  • Broker markets are usually only used for securities that have no public market, necessitating the middleman in the form of a broker.
  • When a client asks their broker to fill an order, it is the broker's job to track down trading partners.
  • The broker provides information about potential buyers and sellers and earns a commission in return.

• The Stock Exchanges

  • So she calls her broker and directs him to sell the shares at the best price he can get.
  • At the same time, an engineer in Florida decides to use some of his savings to buy 100 GM shares, so he calls his broker and places a "buy" order for 100 shares at the market price.
  • Both brokers wire their orders to the NYSE, where their representatives negotiate the transaction.
  • In the end, the schoolteacher gets her cash and the engineer gets his stock, and both pay their brokers a commission.

• Market Strategies

  • Investors who qualify can buy "on margin," making a stock purchase by paying 50 percent down and getting a loan from their brokers for the remainder.
  • If the price of stock bought on margin rises, these investors can sell the stock, repay their brokers the borrowed amount plus interest and commissions, and still make a profit.
  • If the price goes down, however, brokers issue "margin calls," forcing the investors to pay additional money into their accounts so that their loans still equal no more than half of the value of the stock.
  • If an owner cannot produce cash, the broker can sell some of the stock -- at the investor's loss -- to cover the debt.
  • Another group of speculators are known as "short sellers. " They expect the price of a particular stock to fall, so they sell shares borrowed from their broker, hoping to profit by replacing the stocks later with shares purchased on the open market at a lower price.

• When Consensus Cannot Be Reached, Vote

  • In any such complex discussion, there are usually one or two people playing the role of honest broker: posting periodic summaries of the various arguments and keeping track of where the core points of disagreement (and agreement) lie.
  • If the honest brokers have been doing their job well, they will be able to credibly call for a vote when the time comes, and the group will be willing to use a ballot sheet based on their summary of the issues.
  • The brokers themselves may be participants in the debate; it is not necessary for them to remain above the fray, as long as they can understand and fairly represent others' views, and not let their partisan sentiments prevent them from summarizing the state of the debate in a neutral fashion.

• Brokerage

  • So, each actor may have many opportunities to act as a "broker."
  • For each one of the instances where ego is a "broker," we examine which kinds of actors are involved.
  • In figure 9.10, ego B is brokering a relation between two members of the same group, but is not itself a member of that group.
  • Lastly, in figure 9.13, ego B is brokering a relation between two groups, and is not part of either.
  • Suppose that actor B was brokering a relation between actors A and C, and was acting as a "liaison."

• Flow centrality

  • The idea is that actors who are "between" other actors, and on whom other actors must depend to conduct exchanges, will be able to translate this broker role into power.
  • Suppose that two actors want to have a relationship, but the geodesic path between them is blocked by a reluctant broker.

• Agents

  • In the short run, the broker may sacrifice the earnings of the investor to maximize commissions.
  • Hopefully, in the long run the broker will recognize that the short term strategy will result in the loss of the investor as a client.