The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at optionalpha.com and welcome back to the daily call. Today, we’re answering the question, “What is a broker dealer and more importantly, do we still need them?” To quickly answer this question, broker dealers are a very important part of any financial system. In our financial system which is extremely complex, very large and in many cases, very efficient, broker dealers do serve a very important purpose. Now, to now backtrack a little bit and say what is a broker dealer, well, we have to break it down into two things. Well, first, there’s a broker. And so, a broker is just anybody who basically facilitates or helps you buy or sell securities. For example, right now, the best example maybe of this in its rawest format is maybe say Robinhood. Robinhood is a brand new brokerage and all they do is they help facilitate the actual transaction. They are basically if you want to call them, a middleman, they’re a security facilitator where if you want to go buy a stock, you woul