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Brokerage Meaning: Definition, Examples, and Translations

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brokerage

[ˈbroʊkərɪdʒ ]

Definition

Context #1 | Noun

financial services

Brokerage is the act of providing services to facilitate transactions between buyers and sellers in financial markets. It can refer to the business model of firms that engage in buying and selling securities on behalf of clients, as well as the fees charged for these services.

Synonyms

commission agency, financial services, intermediation.

Examples of usage

  • She opened an account with a brokerage to start investing in stocks.
  • The brokerage firm offered a variety of investment options.
  • High-frequency trading is common in many brokerage houses.
  • They were charged a brokerage fee for the sale of their shares.

Translations

To see the translation, please select a language from the options available.

Interesting Facts

Finance

  • Brokerage firms receive payment through commissions, fees, or a combination of both for their service.
  • There are two main types of brokerages: full-service, which provide personalized advice, and discount, which focus on low-cost transactions.
  • The rise of online brokerage platforms has made investing more accessible to people who want to manage their own portfolios.

Technology

  • Technological advances have transformed traditional brokerage practices, enabling faster transactions through digital platforms.
  • Many modern brokerages now offer mobile applications, allowing investors to trade anytime, anywhere.
  • Artificial intelligence is increasingly used in brokerage to analyze market trends and assist in making decisions.

History

  • The concept of brokerage in trade can be traced back to ancient civilizations, like the Greeks and Romans, who had traders acting as intermediaries.
  • In the 17th century, stock exchanges began to form, leading to a more structured approach to brokerage services.
  • The introduction of regulations in the 1930s aimed to protect investors and established standards for brokerage operations.

Cultural Impact

  • Brokerage firms often feature prominently in films and media, portraying the high-stakes world of stock trading.
  • The depiction of brokers in pop culture has influenced public perception, often associating them with wealth and financial success.
  • With the rise of socially responsible investing, brokerages are adapting to cater to clients interested in ethical investing options.

Origin of 'brokerage'

Main points about word origin

  • The term 'brokerage' comes from the Middle English word 'brokere,' which means a person who arranges transactions.
  • The word is derived from the Old French 'broqueur,' which relates to the idea of a trader or merchant.
  • Brokerage originally referred to a service more connected with commodities before expanding to include various financial instruments.

The term 'brokerage' originates from the Middle English word 'brocer,' which means 'to broker' or 'to act as a broker.' The word 'broker' itself comes from the Old French 'broceur,' which means 'the one who breaks.' This is thought to refer to how the broker breaks (or facilitates) deals between parties. Brokerages evolved alongside trade as markets grew, with the needs for organized trading systems and regulations increasing in the 17th century. The establishment of stock exchanges further solidified the role of brokerages in the financial landscape, making them crucial in the exchange of securities and other financial instruments.

Word Frequency Rank

Ranked #11,670, this word falls into high-advanced vocabulary. It appears less frequently but is valuable for expressing precise meanings in specific contexts.