The difference between a broker and a dealer
A broker does not sell you stock or buy stock from you. A broker acts as your "agent," in effect putting you in touch with the other half of the trade you want to make. And for that service, the broker charges you a commission. acts as a broker.
A dealer, on the other hand, can and does act as a "principal," actually taking stock out of its own dealer inventory and selling it to you. Normally, in this transaction, the dealer charges an investor a net price which includes a "markup" on shares purchased or a "markdown" on shares sold. In any given trade, the broker/dealer can charge a commission or a markup but never both.
Another name frequently used instead of broker/dealer is "market maker."
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