TRADE SENSEI
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Practical SetupBeginner5 min

What is a Broker?

Before you can buy a single share, you need an account with a broker. This lesson explains what a broker actually does and why you cannot trade without one.

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Why this matters for beginners

Beginners often confuse the broker (the platform) with the investment (the company they buy). Knowing the difference is the first practical step toward investing safely.

Main explanation

A broker is a regulated company that gives you access to the stock market. You place an order in their app; they route it to an exchange where it gets matched with another buyer or seller.

Brokers can be traditional (full-service firms), online discount brokers, or mobile-first apps. They differ in fees, available markets, account types, and the kinds of products they offer.

Brokers are typically regulated by national authorities (for example the AFM in the Netherlands, the SEC/FINRA in the US, the FCA in the UK). Regulation is one signal, though not a guarantee. That the platform follows certain rules around client money and disclosures.

You do not 'buy from the broker'. The broker is the channel; the actual investment is the share, ETF, or other instrument you choose.

Example using a real company

If you buy 1 share of Microsoft through any broker, you still own the same underlying share. The broker is the road; Microsoft is the destination.

  • →A broker like Interactive Brokers, DEGIRO, or Trading 212 lets you access exchanges. They are examples, not recommendations.
  • →Some banks also offer investing apps that act as a broker layer on top of your bank account.

Common beginner mistakes

  • ✕Choosing a broker only because an influencer promoted it.
  • ✕Assuming all brokers offer the same markets, products, or fees.
  • ✕Confusing the broker's brand with the safety of the underlying investment.

Key terms

Broker
A regulated intermediary that gives retail investors access to financial markets.
Exchange
A marketplace (e.g. NYSE, Nasdaq, Euronext) where buyers and sellers are matched.
Regulator
A government body that supervises financial firms (e.g. AFM, SEC, FCA).

Key takeaways

  • 01A broker is the access point to the market, not the investment itself.
  • 02Brokers differ in fees, products, and regulatory oversight.
  • 03Regulation is one signal of seriousness, not a guarantee against loss.

Check yourself

  1. 01
    You can buy stocks directly without using any broker.
  2. 02
    All brokers offer the same markets and fees.
  3. 03
    Regulation guarantees your investment will not lose value.
Apply this in the Analyzer

Try the concept on a real company

There is no ticker to study here. This lesson is about the platform layer. Once you understand brokers, use the Analyzer to study real companies you might one day hold through one.

Educational examples only. Not buy or sell recommendations.

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