Question about trading securities?

Question

You can buy/sell stock through a brokerage firm.

Or you can buy/sell stocks on a discount brokerage firm like etrade, scottrade, etc.

Who are the people that are selling/buying securities at the NYSE?

I guess whats the difference between the NYSE, Brokerage firm, Discount broker?

Answer 1

All firms that sell, or trade in securities are registered broker/dealers, being registered with the Securities & Exchange Commission.

Some broker/dealers (brokerage firms) provide full services for the clients and some specialize in providing discounted commissions to the clients.

The people are buying and selling on the floor of the exchange are also registered broker/dealers, but some are also registered as specialist and/or market makers.

Only members of the exchange can trade (buy/sell) securities on the exchange.

The NYSE is a registered stock exchange that provides a trading place along with all the facilities and equipment for its members.  The firms that the members own or are employed by are registered broker/dealers.

A discount broker is a brokerage firm that basically generate it's business by providing discount commissions for their customers.

Answer 2

ppl buying and selling secruities are certified brokers.

basically it goes like this

you -> broker -> buy/sell at nyse or something

brokers are the middlemen.

Answer 3

You got correct answers, just one more thing, though:

Some companies sell stock directly to the buying public, without a middleman. These plans are called DRIPS. (Direct investment plans).

Answer 4

The brokerage firms (whether discount or not) take your order, possibly bundle them with other customer orders, and place them at the NYSE and other stock exchanges.   Although there is an increasing amount of stock orders that are satisfied by other routes, such as the internal trading systems at securities firms.

You, as an ordinary customer, would never buy anything directly from the NYSE.

Answer 5

The NYSE is a stock exchange.  The NASDAQ is another.  The AMEX is a 3rd. In the case of the NYSE, one must own a seat on the exchange in order to trade stocks on that exchange. Brokerage firms either do own an exchange seat or buy access to an exchange seat in order to route their orders to the exchange.

A brokerage firm--let's call it a full service brokerage firm--is very little different from a discount broker.  The main difference is that the full service broker will send you an S&P stock guide once in a while if you ask the broker for one nicely and do not ask too often.  They might also send you a stock recommendation whether you ask for it or not depending on how hard they are trying to peddle it.  They will offer advice on portfolio strategies and will offer to guide you toward front end load mutual funds.  That is mostly the difference unless you have a million dollar account.  That ups the ante somewhat and they will become much more attentive.