What Is a Broker?

Imagine you want to buy US dollars using euros, or bet that the price of gold will go up. You can't just walk onto a trading floor and do that yourself. You need a company that gives you access to those markets — that company is called a broker.

A broker is a business that connects everyday people like you to the financial markets. When you open an account with a broker, they give you the tools to buy and sell things like currencies, gold, oil, or company shares, using money you deposit into your account.

Brokers make money in a couple of simple ways. Most charge a small difference between the buying price and the selling price of whatever you're trading, called the "spread." Some also charge a small fixed fee called a "commission" on each trade. This is how a broker earns money while letting you trade for free otherwise.

Not all brokers are the same. Some are regulated, meaning a government financial authority checks that they treat customers fairly and keep client money safe. Others are unregulated, which is riskier — if something goes wrong, you have less protection. Always check whether a broker is regulated before depositing real money with them.

Every reputable broker also lets you open a demo account first. A demo account uses fake money so you can practice trading exactly like the real thing, without any risk. If you're completely new to trading, this is the best place to start — before you ever put in real money.

In short: a broker is your gateway to the markets. They don't decide whether you win or lose — the market does that — but they provide the platform, the prices, and the connection that makes trading possible.