What is the difference between a principal and an agent?

The role of the principal is to delegate responsibilities and provide direction to the agent, while the agent carries out the duties assigned to them. The principal holds a higher degree of liability, and the relationship should be based on mutual trust and confidence to ensure a successful business transition.

What is the difference between Agency vs principal trading?

The difference between agency vs. principal trading is that a principal trade takes a position in the market, while an agency trade doesn’t. An agent simply executes trades on behalf of their clients. I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm.

What are principal and agent trades?

On other occasions, you are only making a trade with your broker. These two main types of trades are known as principal and agent transactions. Principal trades involve a brokerage's own inventory of securities, while agency trading involves trading with another investor, potentially at another brokerage.