Pit Broker financial definition of Pit Broker
Floor broker (redirected from Pit Broker)
who is employed by a member firm
of an exchange
trades on behalf of the member firm's clients. These clients make their orders to the member firm, which is also a brokerage, and these orders are relayed to floor brokers, who conduct the desired trades. Importantly, unlike floor traders
, floor brokers do not trade
on their own accounts.
A member of a securities exchange who executes orders on the exchange floor. For example, commission brokers and two-dollar brokers are floor brokers.
Floor brokers at a securities or commodities exchange handle client orders to buy or sell through a process known as a double action auction, in which brokers bid against each other to secure the best price.
The orders these brokers execute are sent to the floor of the exchange from the trading department or order room of the brokerage firms they work for. When a transaction is completed, the floor broker relays that information back to the firm, and the client is notified.
References in periodicals archive
The pit broker
is obligated to get the best possible price for the customer.