Brokers

A cross is when a broker receives a buy and sell order for the same stock at the same price, and subsequently makes a simultaneous trade between two separate customers at that price. Variations of this are the market opening and market closing crosses

Best execution is a legal mandate that requires brokers to seek the most favorable options to execute their clients' orders within the prevailing market environment. Best execution is a significant investor protection requirement that obligates a broker to exercise reasonable care when executing an order to obtain the most advantageous terms for the customer. It requires brokers to examine, track, and document when routing an equity investment, an option, or a bond order for execution.

Payment for order flow (PFOF) is the compensation a broker receives for routing trades to execute to a particular market maker.

The buy side is a segment of financial markets made up of investing institutions that buy securities for money-management purposes. A business involved in buy-side activities will purchase stocks, bonds, and other financial products based on the needs and strategy of their company's or client's portfolio. Common buy-side institutions include hedge funds, pension funds, and mutual funds.

A deep discount broker is an agent who mediates trades on exchanges between securities buyers and sellers at even lower commission rates than those offered by a traditional discount broker.

The sell side is the part of the financial industry that is involved with the creation, promotion, and sale of stocks, bonds, foreign exchange, and other financial instruments to the public market. The sell side can also include private capital market instruments such as private placements of debt and equity.

A joint brokerage account is a type of investment account owned by two or more people. It allows multiple individuals to contribute funds toward investments and make trading decisions together. Joint brokerage accounts are commonly opened by married couples, siblings, or business partners who want to invest together and pool their resources.

Soft dollars are a means of paying brokerage firms for their services through commission revenue, as opposed to through hard-dollar direct payments.

A trailing commission is a fee you pay a financial advisor each year that you own an investment. The purpose of a trailing commission is to give an advisor an incentive to review a client's holdings and provide advice. It is essentially a reward for keeping you with a particular fund.

Hard dollars are cash fees or payments made by an investor or customer to a brokerage firm in return for their services. Hard dollar payments are usually set amounts that are known before a customer begins dealing with a broker. Hard dollar payments include set transaction charges, monthly account maintenance charges, as well as paying for research provided by the brokerage firm.