Brokerage Account

AAA

DEFINITION of 'Brokerage Account'

An arrangement between an investor and a licensed brokerage firm that allows the investor to deposit funds with the firm and place investment orders through the brokerage, which then carries out the transactions on the investor's behalf. The investor owns the assets contained in the brokerage account and must usually claim as income any capital gains he or she incurs from the account.

INVESTOPEDIA EXPLAINS 'Brokerage Account'

There are several different types of brokerage accounts and brokerage firms; investors are able to choose the type of brokerage account and broker that best suits their financial requirements. Some full-service brokers provide extensive investment advice, charging high fees for their efforts, while most online brokers simply provide a secure interface through which investors can place trade orders and, therefore, charge relatively low fees for their services. Brokerage accounts can also differ in terms of order execution speed, analysis tools used, scope of tradable assets, and the extent to which investors can trade on margin.

RELATED TERMS
  1. Broker

    1. An individual or firm that charges a fee or commission for ...
  2. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
  3. Minimum Deposit

    The smallest amount of money that an investor/trader must initially ...
  4. Brokerage Window

    The ability to direct trading within a brokerage's offering through ...
  5. Form 1099-B

    A form issued by a broker or barter exchange that summarizes ...
  6. Account

    1. An arrangement by which an organization accepts a customer's ...
Related Articles
  1. Picking Your First Broker
    Investing Basics

    Picking Your First Broker

  2. Brokerage Functions: Underwriting And ...
    Brokers

    Brokerage Functions: Underwriting And ...

  3. How To Include ETFs In A Client's 4 ...
    Mutual Funds & ETFs

    How To Include ETFs In A Client's 4 ...

  4. The 4 Ways To Buy And Sell Securities
    Options & Futures

    The 4 Ways To Buy And Sell Securities

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center