InsiderFlow › Glossary › What is a broker?

What is a broker?

A broker is the intermediary that lets you buy and sell financial instruments on an exchange: without one, a private investor can't trade.

Exchanges only accept orders from authorized intermediaries. The broker (a bank or an online platform like Interactive Brokers, Robinhood or Degiro) receives your orders, executes them on the market and holds your securities in custody.

Brokers compete on fees, available instruments, tax handling and reliability. Commissions have compressed to nearly zero, but watch for hidden costs like spreads and currency-conversion fees.

Concrete example

A $1,000 order can cost $1 on a low-cost broker and $20 at a traditional bank: over a hundred trades the difference equals a year's worth of returns.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

Is my money safe at a broker?

Securities are held in your name, segregated from the broker's assets; if the broker fails they remain yours. Cash is covered by protection schemes up to certain limits.

What fees matter most?

Per-trade commissions, currency conversion, custody fees and the bid-ask spread.