
The answer can easily be found: generally, no. It makes no difference whether you buy your shares in Vienna or in Frankfurt. You can also sell your shares in Frankfurt if you have bought them in Vienna. Why does it make no difference? That is one of the great things about stock exchanges – they offer so-called “homogeneous goods”.
Full Answer
Should you buy stocks directly or through a broker?
Purchasing shares of stock directly from the company has been shown to have both advantages and disadvantages compared to buying through a broker. Consideration should be given to the time involved, associated costs, available selection, and how shares are redeemed or traded using a broker as compared with buying direct.
What are the benefits of using a stock broker?
Stock brokers also have access to valuable research resources that clients can tap into in order to get more insight on the investments that they're interested in. These tools give you the ability to weigh different opinions and then choose the ones that are most compelling to you.
What happens if you buy only one share through a broker?
If an investor buys only one share through a broker and the commission charged is $10, the upfront loss would be 40 percent. Then suppose the investor decided to sell the share and paid an additional $10 to the broker. The payout on commission would create a 80 percent loss.
What is the difference between a stockbroker and a market maker?
Stockbrokers coordinate contracts between buyers and sellers, usually for a commission. A market maker, on the other hand, is an intermediary that is willing and ready to buy and sell securities for a profitable price.

Is it better to buy stocks through a broker?
To trade stocks, you'll often need to use a broker to place your orders on an exchange. A full-service broker, while more expensive, provides expert investment research, advice, and commentary in addition to comprehensive financial planning.
What is the difference between a broker market and a dealer market?
The differences between broker and dealer markets also include: Brokers execute a trade on behalf of others, while dealers execute trades on their own behalf. Brokers buy and sell securities for their clients, but dealers buy and sell on their own accounts.
Do you need a broker to buy a stock who are they and why?
Do you need a broker? The short answer is no—you don't need a living, advice-giving, fee-charging broker (although you shouldn't rule them out). You do, however, need a brokerage—the online storefront where you purchase stocks, bonds, exchange-traded funds (ETFs), and other investments.
Does it matter what brokerage you use?
While there may be other things that matter more to you than fees, you should start out with a pretty clear idea of how much you'll pay to use any particular brokerage. For some, a small premium may be justifiable if the platform offers features that its cheaper competitors lack.
What is the difference between brokers and brokerage?
A brokerage provides intermediary services in various areas, e.g., investing, obtaining a loan, or purchasing real estate. A broker is an intermediary who connects a seller and a buyer to facilitate a transaction. Individuals or legal entities can act as brokers.
What is the difference between dealer markets and stock markets that have a physical location?
Some exchanges have their own building where the trades are conducted in auction markets for listed securities. As compared to dealer markets, dealer markets execute trades not conducted by stock markets that have physical location. Transactions for this market are done electronically through phones and computers.
Do you need a stockbroker to buy stocks?
For most new investors, an online brokerage account will be the easiest way to get into the stock market. But if you're still keen to start investing without a broker, look for companies that offer a direct stock plan, which lets you purchase shares directly from the company for a low fee or no fee at all.
What can a stock broker do for me?
A stockbroker is a financial professional who executes orders in the market on behalf of clients. A stockbroker may also be known as a registered representative (RR) or an investment advisor. Most stockbrokers work for a brokerage firm and handle transactions for a number of individual and institutional customers.
What type of broker should you look for to assist you in purchasing stocks?
A full-service broker does much of the legwork for the investor. Discount brokers generally leave you to make your own decisions, although many offer the option to solicit a broker for advice on a particular trade for a fee. Some recommend a full-service broker for new investors.
What is an advantage of an online broker?
With online brokers, you can easily exchange money between your investment, savings, and checking accounts. The transactions between the accounts are executed within one business day, making the process of buying and selling stocks highly efficient.
What makes a good broker?
A good broker is loyal and transparent. Although he or she works with many other professionals (bankers, attorneys, construction professionals, etc), he or she negotiates in your best interest. Another important characteristic of a good broker is integrity.
Broker? Brokerage?
Why do you need a brokerage, but not a broker? Basically, no education or license is required to buy a stock. Becoming a stockbroker —someone buying and selling on behalf of a client—is another story. That requires passing the Series 7 and Series 63 licensing exams. 1 2
First Steps
If you decide that you want to start trading, and going solo is your style, you'll begin by selecting your brokerage. Consulting a well-researched, expertly-written guide may be the best place to start.
Bottom Line
Like riding a motorcycle or skydiving, buying and selling stock without guidance isn't for everyone. But smart investing should be available to anyone who wants to get into the market, so the option to hire a financial advisor or stockbroker is always there.
Should you use a broker or take a D.I.Y. approach to investing?
That depends on a few factors. Do you want to research your investments? Can you evaluate a company? Do you understand time horizon or your appetite for risk? Understanding these things requires time, so you want to consider handing your money to a professional.
What kinds of investments don't require a brokerage?
Direct stock plans and dividend reinvestment plans (DRIPS) permit individuals to buy shares from participating companies. You can buy stock from certain companies, and the plan will automatically reinvest the dividends the companies pay out. Of course, this option is available through online brokerages.
What are the basic steps in buying stock?
Investors must first find a brokerage they like. Then, they have to fund the account with a check or bank transfer. Researching investments is the next critical role, and implicit in this is understanding your finances, goals, and risk tolerance.
What is the difference between a market maker and a broker?
A broker makes money by bringing together assets to buyers and sellers . On the other hand, a market maker helps create a market ...
How does a broker make money?
A broker makes money by bringing together assets to buyers and sellers. On the other hand, a market maker helps create a market for investors to buy or sell securities. In this article, we'll outline the differences between brokers and market makers.
What is a broker in financial terms?
Broker. In the financial world, brokers are intermediaries who have the authorization and expertise to buy securities on an investor's behalf. The investments that brokers offer include securities, stocks, mutual funds, exchange-traded funds (ETFs), and even real estate. Mutual funds and ETFs are similar products in that they both contain ...
Why are market makers important?
Market makers are useful because they are always ready to buy and sell as long as the investor is willing to pay a specific price. Market makers essentially act as wholesalers by buying and selling securities to satisfy the market—the prices they set reflect market supply and demand.
What happens to market makers when demand is high?
If the demand is high and supply is low, the price of the security will be high. Market makers are obligated to sell and buy at the price and size they have quoted. Sometimes a market maker is also a broker, which can create an incentive for a broker to recommend securities for which the firm also makes a market.
What would happen if there were no market makers?
Without market makers, there would likely be little liquidity. In other words, investors who want to sell securities would be unable to unwind their positions due to a lack of buyers in the market. Market makers help keep the market functioning, meaning if you want to sell a bond, they are there to buy it.
What happens if you buy a security?
If an investor wanted to buy a security, they would get charged the ask price, which is set slightly higher than the market price. The spreads between the price investors receive and the market prices are the profits for the market makers.
Why is it better to buy stocks through a broker?
An advantage of purchasing through a broker is that not as much research is involved with a full-service brokerage that offers advice on choices based on the investor's goals and risk toleration. When buying stock directly from the company, the individual investor will need to gather the research required to decide which stocks to purchase.
What are the disadvantages of buying shares from a company?
The disadvantage of buying direct from a company is that redemption of shares cannot happen as quickly, and can take several days. However, not all public companies offer shares of stock for sale directly to private investors. A broker, on the other hand, may offer access to almost all publicly traded stocks worldwide.
What is discount broker?
Discount brokers charge commissions on both purchases and sales of stock shares. Some companies that offer stock directly to private investors pay or waive purchase fees. The minimum investment for direct purchase can be as little as one share under a company direct plan. Buying one share of stock through a broker can produce a significant loss ...
Can an established broker sell shares?
An established broker can sell shares immediately at the current market price during regular trading hours. Access to immediate transactions allows investors to take advantage of an opportunity that can quickly disappear as stock prices change. The disadvantage of buying direct from a company is that redemption of shares cannot happen as quickly, ...
Why do I need a stock broker?
Fundamentally, the key reason why a stock broker can be the gateway to life-changing wealth is because you're the one who takes full control of your investment portfolio when you open a brokerage account.
How to invest that doesn't involve a stock broker?
A much more reasonable way to invest that doesn't involve a stock broker is through mutual funds. These investments involve multiple investors pooling together their savings into a single investment vehicle, with a manager that takes all of the money and invests it according to a specific objective.
What is the alternative to a stock broker?
Finally, the last common alternative to a stock broker is to hire someone to invest your assets in a separately managed account. These services look a lot like an active mutual fund, except that your money isn't pooled together with anyone else's. You can have a portfolio customized to your own particular needs.
Why do stock brokers have access to research?
Stock brokers also have access to valuable research resources that clients can tap into in order to get more insight on the investments that they're interested in. These tools give you the ability to weigh different opinions and then choose the ones that are most compelling to you.
Can you use the wrong broker?
Using the wrong broker could cost you serious money. Over the long term, there's been no better way to grow your wealth than investing in the stock market. But using the wrong broker could make a big dent in your investing returns.
Where do most people stash their spare money?
There are a limited number of ways to achieve that goal. The first place where most people stash their spare money is in a bank account.
Do index funds outperform mutual funds?
However, index funds aren't designed to give investors any opportunity to outperform that index. So if you want market-beating returns, index funds will never be able to deliver. Actively managed mutual funds are different. These funds employ professional investors whose job it is to find the best available investments.
How do dealers become market makers?
Dealers become “market makers” by posting their bid and offer prices. The bid price is the price the dealer is willing to buy the security for, and the offer price is the price the dealer is willing to sell their security for.
What is dealer market?
A dealer market is a financial market where dealers post prices they would be willing to buy and sell specific securities. Trading Securities Trading securities are securities that have been purchased by a company for the purposes of realizing a short-term profit. A company may.
What is an OTC dealer?
Dealers act as “market makers” by adding liquidity and are able to create a market by posting their offer price and bid price electronically. The dealer market is also referred to as an OTC (over-the-counter) Over-the-Counter (OTC) Over-the-counter (OTC) is the trading of securities between two counter-parties ...
What are the characteristics of a dealer market?
Here are some characteristics of the dealer market: Dealers act as market makers and set bid prices/offer prices. Quote- driven – the dealer executes the order and produces a bid and offer price for the market participants. The exchange of securities is executed through the dealer.
What is the singular entity in the auction market?
There is a singular entity in the auction market that controls trade activity by matching the market participant’s bid and offer prices to ensure that a deal is made. There is a centralized trading floor. The auction market primarily consists of stocks.
What is an auction market?
Auction Market An auction market is a market where the price is determined by the highest price the buyer is willing to pay (bids), and the lowest price the seller is.
What is a market maker?
Market Maker: A market maker refers to a financial entity that performs transactions and ensures there is liquidity in the market. The market maker exchanges securities for their own account (principal trade) or their customer’s account (agency trades).
What does it mean to buy a market order?
Even if it executes immediately, a market order to buy will have you paying the highest price out of all the existing sell orders, and a market order to sell means you will get the lowest price from the existing buy orders. For a stock that trades in a narrow range, a market order may not penalize you much. However, when the stock is drawing ...
How does a stock order work?
When you place an order to buy or sell a stock, that order goes into a processing system that places some orders before others. The stock markets have become almost completely automated, run by computers that do their work based on a set of rules for processing orders. If you want your order processed as quickly as possible ...
What is a market order?
A market order to buy or sell goes to the top of all pending orders and gets executed almost immediately, regardless of price . Pending orders for a stock during the trading day get arranged by price. The best ask price—which would be the highest price—sits on the top of that column, while the lowest price, the bid price, ...
What happens when you submit a market order?
When you submit a market order to buy a stock, you pay the highest price on the market. If you submit a market sell order, you receive the lowest price on the market.
What is it called when a market maker changes the spread to their advantage on market orders?
Not only will you pay top dollar or sell for the bottom price, but you can also pay for a little mischief known as slippage. Slippage occurs when a market maker changes the spread to their advantage on market orders and charges a small premium that goes to them as profit.
Why is it dangerous to use market orders?
It becomes dangerous when you use market orders to grab shares solely because you've convinced yourself that you have to own a hot stock at any cost. Thanks to high-speed innovations, small market orders can zip into the market without much warning and be filled.
Can a market order penalize you?
For a stock that trades in a narrow range, a market order may not penalize you much. However, when the stock is drawing a lot of activity, you may find that a strategy built upon market orders becomes a buy-high, sell-low strategy. Reserve use of market orders for trades that need to happen quickly, with less priority given to price.
