Carrying Broker

DEFINITION of 'Carrying Broker'

A commodities or securities broker who provides back office functions such as clearing, settlement and custodial services to other brokers. The carrying broker therefore enables other brokers, known as introducing brokers, to provide full service to their clients without incurring the huge start-up and maintenance costs of running a back office. Introducing broker/carrying broker relationships have existed in the United States since the mid-1970s.

BREAKING DOWN 'Carrying Broker'

The benefits of using a carrying broker include cost efficiencies, economies of scale and risk mitigation. It also allows the introducing broker to focus on its core competencies, such as portfolio management, client relationship management and marketing of products and services.
Carrying brokers also provide additional services, such as maintaining records of client transactions and preparing and distributing client statements and confirmations. Some carrying brokers even provide financing for client margin accounts.

RELATED TERMS
  1. Give Up

    A procedure in securities or commodities trading where the executing ...
  2. Each Way

    A slang phrase used when a broker earns commissions from both ...
  3. Forex Broker

    Firms that provide currency traders with access to a trading ...
  4. Deep Discount Broker

    An agent that mediates sales and exchanges between securities ...
  5. Two Dollar Broker

    A floor broker who executes orders for other brokers who cannot ...
  6. Agency Broker

    A broker that acts as an agent to its clients. When acting as ...
Related Articles
  1. Investing Basics

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  2. Investing Basics

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one.
  3. Forex Education

    Forex Broker Guide: Broker Basics

    RegulationA reputable forex broker should have rules, programs or services to protect the integrity of the market. They should protect the public from fraud, manipulation and abusive practices ...
  4. Brokers

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  5. Options & Futures

    Broker Or Trader: Which Career Is Right For You?

    A day in the life of a broker or trader is an exciting and varied one. Find out how to decide between these two financial professions.
  6. Forex Education

    Is Your Forex Broker A Scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  7. Trading Strategies

    The Best Low-Cost, Web-Based Trading Brokers

    With this table, investors can differentiate between top low-cost, web-based trading brokers by price, capabilities, and offerings.
  8. Brokers

    How Brokerage Fees Work

    What you need to know about fees when choosing between a full service and discount broker.
  9. Professionals

    What Does a Broker Do?

    In the investment world, broker is a term used to refer to an individual or entity that helps facilitate trading in financial securities.
  10. Investing Basics

    Why Use a Discount Broker?

    A discount broker is a stockbroker that does not offer clients investment advice, but trades shares for a smaller commission than a full-service broker.
RELATED FAQS
  1. I'm new to this. Can I sell or buy stock by myself?

    In order to buy stocks, you need the assistance of a stock broker since you cannot just phone up a company and ask to buy ... Read Answer >>
  2. How does an insurance broker make money?

    Discover how an insurance broker makes money. Insurance brokers are important in helping people find the right insurance ... Read Answer >>
  3. There are so many stockbrokers out there. How do I go about choosing the best one ...

    If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give ... Read Answer >>
  4. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two ... Read Answer >>
  5. Why do brokers ask for personal information before they make any trades?

    According to the Securities and Exchange Commission (SEC), there are three main reasons why a broker will ask for personal ... Read Answer >>
  6. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center