WHAT TYPES OF BROKERS DO YOU KNOW?

When you first see the trading floor, you might assume all brokers are the same, but they aren't. There are five categories of market professionals active on the trading floor.

Commission Brokers, usually floor brokers, work for member firms. They use their experience, judgment and execution skills to buy and sell for the firm's customer for a commission.

Independent Floor Brokers are individual entrepreneurs who act for a variety of clients. They execute orders for other floor brokers who have more volume than they can handle, or for firms whose exchange members are not on the floor.

Registered Competitive Market Makers have specific obligations to trade for their own or their firm's accounts - when called upon by an Exchange official - by making a bid or offer that will narrow the existing quote spread or improve the depth of an existing quote.

Competitive Traders trade for their own accounts, under strict rules designed to assure that their activities contribute to market liquidity.

And last, but not least, come Stock Specialists. The Exchange tries to preserve price continuity - which means that if a stock has been trading at, say, 35, the next buyer or seller should be able to execute an order within a fraction of that price.

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Yours sincerely,

AlexSandra