Stock Broker vs Stock Trader

Read this review which will help you to understand the difference between a trader and a broker. Both of them work in the finance field and their job involves researching the investments and also giving advice on how to trade the securities. The nature of the work that they do is however different.

The stockbroker basically acts as an intermediary and he executes trades on his client’s behalf. The traders on the other hand invest for institutional clients and also invest the firm’s capital. The roles are slightly different and this is based on what their qualifications are.


The traders buy and sell the security in the financial market. They could be agency traders who trade on the client’s behalf or proprietary traders who trade for the firms.

The proprietary traders will analyze the investment opportunities in different securities like derivatives, shares, commodities etc. The securities are evaluated based on what return they would be able to deliver. The prop traders are also well trained and have knowledge of advanced financial analysis.

The trader’s career advances based on his performance in making better investments. Theagencytrader’s role is to maintain a good spread at which they buy the security and at which they sell the client the security.  The prop trader should be able to make good returns on the firm’s capital. The track record of the trader would help him grow where he will be able to manage more capital and earn a better commission.

The poor performance of a trader can make them lose their job but those who perform well have the sky as the limit.


A stockbroker, on the other hand, is like a trader but they trade on the client’s behalf instead of trading for institutions. He gets to earn commission on the service that he provides.  Some brokers may give their own recommendation to the client or some may just trade based on what the client wants them to trade on. The stockbroker will have less knowledge of finance as compared to a trader but his job needs him to have a knack for sales. He is an extrovert because he needs to face the clients more.

Stockbrokers earn commission and their primary role is to make their clients trade more. They also need to get more accounts to trade in large amounts of capital. The potential of risk is lesser in the case of a stockbroker because his job is comparatively less challenging.