Brokerage
firms provide an essential service for individual investors:
They link you to the financial markets.
Your orders to buy or sell publicly traded
securities, options, or futures contracts must be handled through
a brokerage firm. You can buy and sell mutual funds, annuities,
managed accounts, limited partnerships, and a long list of other
financial products through a firm as well. And, if you wish, you
can establish an asset management account (AMA), called a central
asset account (CAA) at some firms, which provides a credit card
and a money market fund you can use as a checking account.
A brokerage firm, also known as a
broker-dealer,
may be a huge multinational corporation, a public or private national
or regional company, or a small partnership. The larger the firm,
the greater the range of businesses it may be engaged in, and
the greater the variety of services it may offer.
Wired firms The largest brokerage firms are
identified as
wire houses,
though the high-speed communications
systems that once gave them a competitive advantage
over smaller, unwired firms have been replaced by
the real-time information available to any firm with
a computer and an Internet connection.
Your orders to buy or sell publicly traded
securities, options, or futures contracts must be handled through
a brokerage firm. You can buy and sell mutual funds, annuities,
managed accounts, limited partnerships, and a long list of other
financial products through a firm as well. And, if you wish, you
can establish an asset management account (AMA), called a central
asset account (CAA) at some firms, which provides a credit card
and a money market fund you can use as a checking account.
