What Is a Broker? Definition, Role, and Types Across Financial Markets

Definition:

A broker is an individual or company that facilitates the buying and selling of financial instruments on behalf of clients in exchange for a fee or spread.

Explanation:

Brokers act as intermediaries between traders and the market. They provide platforms, tools, and access to financial instruments across various asset classes. While the general concept is similar, brokers differ significantly depending on the market:

• Forex Brokers: Offer leveraged currency trading via platforms like MetaTrader. Common types include ECN, STP, and market makers.
• Crypto Brokers: Provide access to cryptocurrencies either via CFD trading or direct exchange. Some offer wallets and staking services.
• Stock Brokers: Facilitate equity trading on exchanges like NYSE or NASDAQ. May be full-service or discount brokers.
• Prop Trading Brokers: Work with funded trader programs or prop firms, offering capital to skilled traders in exchange for profit splits.

Choosing the right broker involves evaluating regulation, spreads, platforms, customer service, deposit/withdrawal methods, and execution speed.

Example:

A Forex trader uses a regulated ECN broker to trade EUR/USD with tight spreads and fast execution via MetaTrader 4 and Metatrader 5  or Ctrader

Related Terms:

ECN, STP, Market Maker, Exchange, Trading Platform, Spread, Regulation

Category:

Brokerage / Financial Infrastructure

FastPip Tip:

Not all brokers are created equal. Always check a broker’s license, trading conditions, and user reviews before opening an account.

Looking for the best broker for your trading style?

✅ Visit our in-depth Broker Comparison Page to see which ones offer the best spreads, platforms, and features.