What group consists of brokers such as commission brokers and odd-lot dealers?

What group consists of brokers such as commission brokers and odd-lot dealers?

• A. Traders
• B. Market makers
• C. Security exchange members
• D. Investment analysts

Answer: (C)

The correct option is comprised of professionals who play a crucial role in the functioning of financial markets. Brokers, such as commission brokers and odd-lot dealers, are categorized as members of a securities exchange who facilitate transactions on behalf of clients. They provide essential services by executing buy and sell orders for securities, thereby making them a vital part of the trading ecosystem within exchanges. Commission brokers represent clients and earn a commission on trades, while odd-lot dealers specifically handle transactions that involve non-standard quantities of securities. By connecting buyers and sellers, these brokers help maintain liquidity in the markets, allowing for efficient price discovery and execution of trades. In contrast, traders primarily engage in buying and selling securities for their own accounts, market makers provide liquidity by being ready to buy and sell at publicly quoted prices, and investment analysts focus on evaluating securities to provide recommendations based on their analyses. While these roles are integral to the financial system, the question specifically highlights brokers who operate within securities exchanges, making ‘security exchange members’ the most appropriate classification.

The correct option is comprised of professionals who play a crucial role in the functioning of financial markets. Brokers, such as commission brokers and odd-lot dealers, are categorized as members of a securities exchange who facilitate transactions on behalf of clients. They provide essential services by executing buy and sell orders for securities, thereby making them a vital part of the trading ecosystem within exchanges.

Commission brokers represent clients and earn a commission on trades, while odd-lot dealers specifically handle transactions that involve non-standard quantities of securities. By connecting buyers and sellers, these brokers help maintain liquidity in the markets, allowing for efficient price discovery and execution of trades.

In contrast, traders primarily engage in buying and selling securities for their own accounts, market makers provide liquidity by being ready to buy and sell at publicly quoted prices, and investment analysts focus on evaluating securities to provide recommendations based on their analyses. While these roles are integral to the financial system, the question specifically highlights brokers who operate within securities exchanges, making ‘security exchange members’ the most appropriate classification.