Differences between a trading platform and a broker
A broker is essentially a sales representative whose job it is to negotiate on the trader’s behalf and on the behalf of the other buyer/seller in the trade. They usually work for firms and buy and sell stock and securities on behalf of a trader who has given money to allow it to be invested. A trading platform, on the other hand, allows traders to open, close, and manage trades using the platform as the intermediary. Trading platforms are often offered by brokers so that traders can do their own trading, as long as they make a designated amount of trades in an allotted time. Both brokers and trading platforms have pros and cons when it comes to trading online.
Does the Difference Matter?
For some aspects of trading, there makes no real difference which method you use. For example, short selling can be done through a broker or through a CFD (contract for difference). Short selling refers to the act of selling an asset that you don’t own in the hope that, by the time the deal goes through, it will have decreased in value so you can make a profit. This can be done through a broker, who will sell the asset for you, give you credit, and allow you to buy back the asset to give back to the broker. Though, CFDs through a platform could be used to do the same thing and trading on the leverage if the price of the CFD drops during the trade. However, doing this through a broker means that someone must be available to lend the stock in the first place, so a CFD could be the best option.