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Floor Broker (FB) Definition

Definition

The investment term flooring broker identifies to a different associate of a market which can help execute customer requests. Floors brokers sell and buy securities by an expert; wanting to receive the very best possible price for his or her clientele.

Explanation

Also called being a pit broker, a ground broker (FB) works on a stock market floor. The broker doesn’t trade in their behalf; rather they represent their customers ‘ interests. Floor brokers earn a commission on each transaction, typically in the one to five cents per share exchanged. Clients include large financial institutions, mutual and pension funds, high net worth individuals, day traders, as well as hedge funds.

When an order is sent to the broker, they engage the floor specialist in that stock. The broker then proceeds to bid against other floor brokers in order to obtain the most competitive price for their client. Once the transaction is complete, the trade information is relayed back to the client. While the broker and market specialist are individuals sharing verbal information on the floor of the exchange, the data is transmitted back to clients electronically.