Agency Brokers and Their Services, Stock Market Agency Brokers Explained

Agency brokers are usually large brokerage firms acting as agents to their clients. They perform trading from their clients behalf. The main clients of agency brokers are institutional traders and hedge funds who route large numbers of traders to the agency brokers. Thus they are the middle men between the stock, or any other financial instrument, exchange and the clients.

Agency brokers are believed to perform trades according to the best interest of their clients. They fill the orders from the institutional traders at lowest possible prices and perform faster trade executions for them. Agency brokers also provide a number of other services such as white labeled (or private labeled) trading platforms, trading account management tools, various technical analysis tools and occasional rewards to their clients to improve and popularize their trading services.

Agency brokers charge for their services usually in per trade basis. The fee per trade varies with broker to broker and most agency brokers allow institutional traders and hedge funds to negotiate with them for cheap rates. One major thing to look upon when selecting a agency broker is the hidden charges, if any.

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