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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.

What is principal trading vs agency trading?

When it comes to trading securities, investors have two main options: principal trading vs. agency trading. Principal trading involves a trader buying or selling securities on their own account, with the goal of profiting from price movements.

What is principal trading & agency trading?

In the world of financial markets, two prominent approaches to executing trades are principal trading and agency trading. Principal trading involves brokerages using their own inventory of securities to complete customer trades, allowing them to profit from the bid-ask spread.

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