What is the role of a broker in financial markets?

The role of a broker in financial markets is primarily to facilitate the buying and selling of securities on behalf of clients. When a broker is paid to buy and sell for someone else, they act as an intermediary between buyers and sellers, executing trades based on the instructions provided by their clients. This service allows individual investors and institutions to access the financial markets without needing to directly engage in trading themselves. Brokers earn commissions or fees for their services, which align their interests with those of their clients, as their compensation is dependent on the volume of trades they execute on behalf of others.

In contrast, holding securities and taking risks would typically describe a dealer or investor rather than a broker. Buying and selling for their own benefit is more characteristic of traders or market makers who take positions in securities. Operating direct search markets generally refers to a market structure where buyers and sellers find each other directly without intermediaries, further distinguishing brokers who facilitate these interactions from those who handle the trades for their personal gain.