What is the difference between being a stock broker and a trader. how can i become a trader with out the

Question

the intial 10,000 start up up costs most companies require.... thanks every one, for every useful information.

Answer 1

A broker handles stock trades for clients. He earns a commission. He may simply be an order taker.

A trader trades stocks to make a commission. He may work for himself or for another company. Usually he is making the decisions about what and when to buy and sell. His transactions have to go through a broker.

Answer 2

a broker is a salesman.

a trader buys and sells things in the marketplace to make money.

i'm confused by the part about needing 10k.

no employer would require you to front the capital you trade with.

and if you're just trading on your own, you don't need to go through a company, anyway.

but, if you are doing this on your own, you should know that if you do it with less than 25k capital, you will be precluded from making very many trades by the SEC.

Answer 3

A stock broker is a registered sales person that is licensed to speak directly with the general public.  They can give investment advice, accept orders and provide execution reports to the clients of the firm.

They are usually commissioned (bank sales reps are salaried) and work under the direct control of the firm that has provided their license.

A trader is one who buys and sell securities, either for themselves or for the firm that employs them.

If a firm requires you to put up $10 grand or $,01 go with a real firm. Most firms do not require their traders to put up any money.  

Depending on the type of trader, many are salaried but also share in both the trading profits and losses they generate.

The firm is probably asking you to put up ten grand is that you are not a trader, and lack the background necessary to be one.  The company doesnot want to take a chance with you, nonetheless, this is not a common practice in the industry but with want-a-be's it's understandable.

Answer 4

A broker is a licensed representative(salesman) of a brokerage firm.A trader is anyone with an account.To be a trader all you need is an account however if the account is small the commissions are higher per trade.That's why most firms suggest at least a 10k account(it is not legally necessary)

Answer 5

it sounds like you're talking about 10k required by brokers so you can trade commodity futures?

you can avoid that by trading a forex account which requires very little money. see www.forex.com

Answer 6

A stock broker is considered a liquidity provider.  This is because a broker works like a middle man, selling whenever somebody wants to buy a specific stock and and buying whenever somebody wants to sell it.  This is of course done in exchange for a fee, a broker's commission and the spread.  The broker would usually have inventories of liquid stocks that are normally traded in the market.  Because a broker is like a middleman, he doesn't take position.  Meaning, he don't bet on whether a stock is going to rally or plummet.

On the other hand, a trader takes position in the market.  He would bet on which stocks or derivative products will be a profitable deal.  Depending on his trading strategy, positions could be closed for a period of time or intraday and take profits or cut any losses.  To trade in the stock exchange, you need to buy a seat and put a margin.  The margin works like a bond for your trading capacity to cover for counterparty risks.  So if you buy and sell on the exchange, the exchange will compute your net position and check whether you have available margin to cover it, any changes resulting to losses on your position that exceeds your initial margin will result to margin calls.  Therefore start up cost is necessary.  It's like going to a casino where you are required to first buy some chips so you could play.

Because of the above stated functions, traders are the clients of brokers.  Traders take bets and could gain large profits or suffer huge losses.  On the other hand, brokers gets small profit with each deal made with the traders and the risks would be on the inventories of stocks they will be holding, nevertheless, such risk is minimal.

If you're interested in trading, would suggest paper trading for start up.  No costs required.  However, it is believed that you only learn when you bleed, meaning, when you lose real money, especially your own.

Answer 7

what type of trader?