When you open a brokerage account with a company, that company will buy or sell shares based on your instructions and hold them on your behalf. Brokers facilitate the trading of shares by executing on behalf of their clients.
![best futures trading platforms reviews best futures trading platforms reviews](http://www.indicator-forex.com/wp-content/uploads/2013/06/gold-silver-oil-indicator-binaries-trader-ed.png)
What is a broker?Ī broker is a firm that acts as a middleman between an investor and an exchange. OTC markets are generally less liquid than public exchanges, with relatively lower daily share volume. Rather, they trade over-the-counter, also known as the OTC market, which is a network of brokers and dealers that are willing to transact on their own or a clients behalf. Smaller companies with lower market capitalization do not trade on an exchange. When there is a price match, a transaction occurs. Trading occurs electronically, with buyers and sellers submitting the price at which they would buy and sell. The shares of large companies trade on large, public stock exchanges, such as the NY Stock Exchange (NYSE) or NASDAQ market which trade millions of shares daily. After the IPO, the shares may be bought and sold on an exchange. When first made available to the public, shares or ownership units are sold in an IPO or initial public offering.
![best futures trading platforms reviews best futures trading platforms reviews](https://daytradingz.com/wp-content/uploads/2019/10/TradeStation-Trading-Platform.jpg)
Typically, ownership of a company is distributed among multiple shareholders. As owners of the company, shareholders may get distributions of the company’s profits, known as dividends. Companies issue shares of stock in order to generate money, known as capital, to grow or operate their business. A share entitles the holder to one vote and a claim on the profits of that company. Shares of a stock represent ownership units in a specific company.