Floor Broker (FB)
 |
Definition of 'Floor Broker (FB)'An independent member of an exchange who is authorized to execute trades on the exchange floor on behalf of clients. A floor broker is a middleman who acts as an agent for clients, indirectly giving them the best access possible to the exchange floor. A floor broker’s clients typically include institutions and wealthy people such as financial-service firms, pension funds, mutual funds, high net worth individuals and traders. A floor broker’s primary responsibility is “best execution” of client orders, and to achieve this objective, he or she must continuously assess myriad factors including market information, market conditions, prices and orders.Also known as “pit broker.” |
 |
Investopedia explains 'Floor Broker (FB)'Once a floor broker receives a buy or sell order for a specific stock, he or she will attempt to get the most competitive market rate for the client. The floor broker does this by proceeding to the trading post on the exchange floor, where the specialist for the stock is located, and bids against other brokers and traders to get the best price for the stock purchase or sale. Upon completing the transaction, the floor broker notifies the client through the client’s registered representative.A floor broker is different from a floor trader, who trades as principal for his or her own account, whereas the floor broker acts as an agent for clients. A floor broker also differs from a commission broker in that the latter is an employee of a member firm, while the floor broker is an independent member of the exchange. |
Related Definitions
Articles Of Interest
-
What Is A “Broker-Dealer” And Why Should You Care?
For many investors, the financial services industry is a strange and mysterious place filled with a language all in its own. Terms like “alpha,” “beta” and “Sharpe-Ratio” ... -
Broker Commissions Are Here To Stay
With two developed nations adopting a firm anti-commission stance, questions have arisen over whether or not the United States should follow suit. Find out why such a development is unlikely. -
Understanding Order Execution
Find out the various ways in which a broker can fill an order, which can affect costs. -
Banker Or Broker: Which Career Is Right For You?
Bankers and stock brokers may share similar traits, but there are many differences between the two professions. -
4 Dishonest Broker Tactics And How To Avoid Them
Protecting yourself from unscrupulous practices means knowing how to spot them. -
What are some common hand signals on the trading floor?
"Hand signal" is the sign language used by traders to transmit basic information on the trading floor. The use of hand signals on the trading floor is said to have originated for many reasons. ... -
Why are traders on the floor of the exchange?
Before the advent of electronic trading platforms, the floor of the stock exchange was the location for market transactions in stock exchanges. The floor of the stock exchange is the physical ... -
The Global Electronic Stock Market
The way trading is conducted is changing rapidly as exchanges turn toward automation. -
A Nightmare On Wall Street
These tales of banking terror sent shivers down the spines of even the most steadfast bankers. -
Brokers and Online Trading
How do you find the right broker for your investment needs? Start by reading our broker tutorial.
Free Annual Reports