What is a Brokerage House?

by Contributing Writer

Overview

A brokerage house is a company licensed to buy and sell stocks or securities on behalf of buyers and sellers. Brokerage house employees, or brokers, carry out the requests of the firm's clients in trading stocks. Brokers are usually paid by commission.
Service Correlates to Cost

Brokerage house commissions charged for the buying and selling of securities are all over the map. Often, you get what you pay for with brokerage services. Brokerage house with lower fees may mean your trades are not executed as quickly as at ones that charges higher fees. Investors also pay more for more personalized service.

Investment Products

A brokerage house usually offer stocks, mutual funds, and options, as well as government and corporate bonds, and sometimes over-the-counter (OTC) bulletin board stocks.
Trading

There are different ways of implementing trades. A brokerage house may allow for trading over the phone or via the Internet, by mail, or through other methods.
Banking Services

Investment products aren't all that brokerage houses offer; they often also provide banking services. These services range from money market sweeps and check writing to visa and ATM cards.
Research and Strategies

Often, a brokerage house offers market research and investing strategies as well.