We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Floor Broker?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Floor brokers are investment professionals who are authorized to purchase and sell investments on the floor of an exchange. A floor broker will be a member of the exchange where he or she conducts the investment transactions on behalf of a client. After executing an order of some type, the broker relays the information to the brokerage firm, who goes about the process of applying the order to the client account and reporting the trade so that it shows up on exchange activity posted online and accessed via ticker tape.

A floor broker is not the same as a floor trader. Traders are individuals who are members of the exchange and are there to execute orders on their own behalf. As such, the trader is able to make decisions on trading activity that may or may not be in keeping with his or her usual strategies. In contrast, the floor broker always represents the interests of a client of the brokerage firm that employs the broker, and conducts buying and selling activity in accordance with guidelines approved by the client.

The importance of a floor broker to the investing process cannot be underestimated. Often, the floor broker becomes aware of information immediately, something that may or may not be the case for most investors. Since the broker acquires this information the moment that it becomes public knowledge, it is possible to make use of that information without any delays. Assuming that the level of authorization provided by the client is sufficient, this means that the floor broker is in an excellent position to prevent an investor from incurring a sudden loss due to unanticipated changes in the marketplace. At the same time, the broker can get the investor in on a good deal before the unit price of the securities begin to increase drastically.

In all dealings, the floor broker must follow the rules and regulations set in place by the exchange. Failure to do so can lead to temporary expulsion from the market floor, a situation that greatly hinders the ability of the brokerage firm to provide superior service to the client. In situations where repeated infractions take place, the floor broker may be subject to fines, or even permanent banishment from the exchange floor. For this reason, floor brokers often go to great lengths to make sure they are in full compliance with both the regulations of the exchange and any laws put in place by governmental regulatory agencies that oversee investing activity within a given nation.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Related Articles

Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.