In this episode, we unpack the critical definition and functions of a broker-dealer, a financial entity that operates at the heart of the securities trading process. We explain the vital distinction between acting as a broker—executing trade orders on behalf of customers—and acting as a dealer—trading securities for the firm’s own account.

Listeners will learn about the main activities of these institutions, including:

• Market Making: How dealers announce prices and ensure liquidity by committing to buy and sell securities at set prices.
• Distribution: The role broker-dealers play as the primary sellers of mutual fund shares.
• Risk Management: How dealers hedge the risks of selling to end-users by participating in th ...