What is a Broker Account?

Definition Definition: What is a Broker Account? A broker account (also known as a brokerage account) is defined as an account that allows an investor to deposit funds and place investment orders with a licensed broker or brokerage firm. The broker carries out the transactions on the investor's behalf for a fee called a “commission”.

How do I open a brokerage account?

Once you choose a broker, you’ll open a brokerage account, which is an investment account. You need a brokerage account to buy or sell stocks and other investments, such as mutual funds. The broker will walk you through the process of opening an account, which takes minutes and is typically completed online.

What is a stockbroker and how does it work?

A stockbroker is a type of broker that allows you to buy and sell stocks, bonds, and other securities. When you choose a broker, you open a brokerage account, which is a fundamental step to becoming an investor. Securities are bought and sold on stock exchanges, like the New York Stock Exchange and Nasdaq.

What are the different types of brokerage accounts?

In any type of brokerage, the most basic account is a cash account. This allows clients to buy investments using the money deposited in the account. However, you cannot sell short, buy on margin, trade options, or take advantage of other more sophisticated products. To do so, you need a margin account .