Trading Shares – Who Does What? - dummies

By Michael Wilson

Part of Reading the Financial Pages For Dummies Cheat Sheet (UK Edition)

After reading the financial pages thoroughly, you’re ready to get started on the business of buying shares. Now you need to know which professionals to use, and what for. This is what they do:

  • The broker obtains the shares on your instructions, and may also hold them for you.

  • The market maker is the ultimate buyer and seller, who sells you the shares you buy and buys the shares you sell. Since the Big Bang deregulation of 1986 he is likely to be a broker in his own right.

  • The nominee account manager holds your shares on your behalf if you are running your portfolio through a third party – as would be normal if you were

  • The house broker (small companies) Companies under a certain size may have only one broker trading their shares and acting as market maker. Share prices may therefore be less robustly competitive than in a situation where multiple brokers are competing for the business.