Learn · Trading foundations · Beginner
Brokers & Trading Accounts
Understand the firm, the account and the trading access behind the platform.
Learn how brokers and trading accounts work, why account structures differ, how trading costs and margin affect your exposure, and what to verify before choosing or funding a trading account.
Part of Trading foundations. In the current pathway this lesson follows Market orders and execution and comes before Commissions, fees and slippage.
What you'll learn
The firm
Understand what a broker does and who provides your account.
The account
Distinguish trading account types and product access.
The figures
Understand account equity, cash, margin and leverage.
The bill
Recognise commissions, spreads and recurring charges.
The register
Verify legal entities, permissions and relevant protections.
The comparison
Compare two account offerings using a practical checklist.
What is a broker?
A broker is a firm that deals for you or with you so that an order can become a position. In a listed market the firm is often your agent and may also arrange custody. In a contract for difference, and in many retail currency accounts, the firm is often the other side of the contract. The same marketing brand can do both, in different accounts, through different companies.
The roles below are jobs, not a single organisation chart. A company can perform more than one. The familiar name on the app can differ from the company that signs your agreement. The short definition stays in the glossary: Broker: definition.
Broker
A firm that gives you market access under a client agreement. In listed markets it often acts as your agent.
Broker-dealer
A firm that can both handle customer orders and trade for its own account. The combination is a regulatory category, not a brand style.
Introducing broker
A firm that brings the customer and the relationship. Another firm may execute, clear or hold the account.
Executing broker
The firm that sends or fills the order. It is not automatically the firm that holds the assets afterwards.
Clearing broker
The firm that manages margin and settlement with a clearing house. Many brokers do not clear for themselves.
Custodian
The institution that holds securities in safekeeping. It can be the broker, an affiliate, or a separate custodian.
Trading platform
The screen and the order ticket. Software is not the legal party to the trade.
Exchange
A venue with public rules for listed instruments. An order reaches an exchange only when the product is listed and the firm has access.
OTC counterparty
The other side of a contract that is not executed on an exchange. In many forex and CFD accounts, that other side is the provider.
Product issuer
The company or fund that creates a security, such as an ETF. The broker that sells it to you is a different role.
How a brokerage account works
The account is the record of cash, positions, permissions and amounts you owe. The platform is how you look at that record. Funding the account, getting approval for a product, and sending an order are separate steps. An order the screen accepts can still be rejected by the firm’s rules or by the venue.
What the account holds depends on the product. A share account can hold securities, often through a nominee or custodian. A derivatives account holds contracts and collateral. Cash at the firm can sit in a client-money arrangement or as a deposit the firm owes you. Those are different claims if the firm fails, and the agreement is where the distinction is written.
What happens when you place a trade?
The diagram is a teaching model. Real workflows differ by market, product, firm and account. Selecting a path changes the relationships. It does not send an order.
- 1Trader
- 2Trading platform
- 3Broker or order-routing system
- 4Trading venue
- 5Clearing and settlement
- 6Custody and account records
A possible path for a listed share. The broker may route to a venue and may use another firm to clear. This is not a claim that every securities broker self-clears.
The broker brand is not always your contracting firm
A parent company can own several subsidiaries. Each subsidiary can have a trading name, a regulator, and a customer agreement. An introducing arrangement can put the brand you recognise in front of a different firm that holds the account. Firms also migrate accounts between entities. The agreement for the account you are opening is the document that names the provider.
The group below is fictional. It is not a map of any real company.
Northwind Markets is only a brand. It is not a legal person in this example.
- Northwind Markets LtdA subsidiary. Contracting entity for customers in one jurisdiction, under that country’s rules.
- Northwind Markets IncA separate subsidiary. Different regulator, different products, different agreement.
- Northwind Introducing LtdMay introduce a customer. It does not, in this example, hold the securities.
A login that looks the same after you move country can still be a new company. Read the legal name before you fund it. The research note is The legal entity on the contract is the firm you have.
Types of trading accounts
The cards describe economic arrangements. They are not a menu a particular firm offers, and they do not say that you are eligible. Where a rule varies by country, the card says so instead of picking one country’s version and calling it universal.
Cash account
Purchases are funded with cash. The account does not, by itself, lend you the purchase price.
- Typical instruments
- Often shares, funds and other cash-settled securities the firm actually offers.
- Borrowing or leverage
- Not part of a plain cash purchase. Some products inside the account can still be derivatives.
- Margin
- A cash balance is not margin collateral unless the agreement says so.
- Main costs
- Commission, spread, conversion, and any account charges on the firm’s schedule. The lines differ by firm.
- Main risks
- The holding can fall. Settlement timing can limit what you can sell or reuse. Rules are not the same in every country.
- Eligibility
- Not inferred. The firm and your country decide who may open the account.
Margin account
The firm may lend against collateral, or treat posted collateral as support for a larger position.
- Typical instruments
- Whatever the margin agreement and the permissions allow. A margin account is not a promise of every listed product.
- Borrowing or leverage
- Borrowing or margin can be available. Buying power is the firm’s figure, not a standard multiple.
- Margin
- Initial and maintenance levels are in the agreement. Interest or financing can apply to a debit.
- Main costs
- The cash-account charges, plus financing on borrowed balances where the product is a loan.
- Main risks
- Losses are larger relative to cash. The firm can sell collateral if requirements are not met. This page does not calculate that point.
- Eligibility
- Not inferred. Approval, experience questions and country rules are the firm’s.
Futures trading account
Access to exchange-traded futures, if the account is approved and the firm supports the contract.
- Typical instruments
- Listed futures the firm and the exchange actually carry. A chart of an index is not that contract.
- Borrowing or leverage
- Collateral supports a larger contract exposure. That is leverage, even when nobody calls it a loan.
- Margin
- Initial margin opens the position. Variation margin moves with daily settlement. House margin can exceed an exchange minimum.
- Main costs
- Commission, exchange fees, clearing fees and regulatory charges can sit on different lines.
- Main risks
- The loss can exceed posted cash. Contracts expire. Some can go to delivery if you hold them.
- Eligibility
- Not inferred. Futures permission is separate from a cash share account.
Options trading account
Listed options, where offered, often sit behind an approval level.
- Typical instruments
- Calls, puts and multi-leg strategies the approval actually allows. Short options create obligations.
- Borrowing or leverage
- Long premium is a defined cash outlay. Short options and some spreads use margin.
- Margin
- Short-option margin is an obligation calculation, not the premium you received.
- Main costs
- Commission per contract, exchange fees, and exercise or assignment charges where the schedule lists them.
- Main risks
- A long option can expire worthless. A short option can be assigned. Early assignment exists on some contracts.
- Eligibility
- Not inferred. An options approval is not granted by opening a share account.
Forex trading account
Currency trading is usually an OTC contract, with a structure that depends on the jurisdiction.
- Typical instruments
- Pairs the firm quotes. A pair is a base currency priced in a quote currency.
- Borrowing or leverage
- Retail leverage caps exist in some countries and not in the same form in others.
- Margin
- Margin is collateral on the contract. Rollover or financing can apply overnight.
- Main costs
- Spread, commission, conversion and financing are separate. A tight spread at a quiet hour is not the spread at a data release.
- Main risks
- A small price move is a large cash move when exposure is a multiple of equity. The provider can be the counterparty.
- Eligibility
- Not inferred. Product rules and leverage limits follow the entity and the customer’s country.
CFD or spread-betting account
An OTC derivative that pays the change in a price. Spread betting is a related but distinct product.
- Typical instruments
- Contracts the provider writes. They are not the share, the future or the commodity.
- Borrowing or leverage
- Margin is typical. Caps for retail customers depend on the regulator of that entity.
- Margin
- The provider sets collateral and can close positions under its terms.
- Main costs
- Spread, commission and overnight financing can all apply. A zero on one line does not clear the others.
- Main risks
- You have a contract with a counterparty. If the firm fails, the claim is not a share at a separate custodian.
- Eligibility
- Not inferred. Some countries restrict or prohibit the product for retail customers.
Demo or paper account
Simulated money on a practice ticket. Useful for learning the screen. Not a record of live fills.
- Typical instruments
- Whatever the simulator includes. A missing contract in the demo can still exist live, and the reverse is also true.
- Borrowing or leverage
- Any leverage in the demo is simulated.
- Margin
- A simulated margin call is not the live firm’s rule.
- Main costs
- Quoted costs in a demo can ignore the spread you would actually cross, or the queue you would actually join.
- Main risks
- Fills, slippage and liquidity are assumptions. A profit in the demo is not evidence about a live account.
- Eligibility
- Not inferred. A demo does not prove you would be accepted for a live account.
Professional or institutional account
A classification for customers who meet stated tests. It is not a higher grade of safety.
- Typical instruments
- Access can be wider. It can also drop retail protections, leverage caps and disclosure duties.
- Borrowing or leverage
- Leverage limits that apply to retail customers may not apply.
- Margin
- Terms are negotiated or set out in a professional agreement. They are still the firm’s terms.
- Main costs
- Pricing can differ. A lower headline charge is still not the whole bill.
- Main risks
- You may lose retail complaint routes or compensation eligibility. Read the classification before you ask for it.
- Eligibility
- Not inferred. Tests look at experience, size or work. Meeting them is not a recommendation to opt out.
Which trading account does what?
| Account type | Typical instruments | Borrowing or leverage | Margin | Main costs | Main risks | Eligibility |
|---|---|---|---|---|---|---|
| Cash account | Often shares, funds and other cash-settled securities the firm actually offers. | Not part of a plain cash purchase. Some products inside the account can still be derivatives. | A cash balance is not margin collateral unless the agreement says so. | Commission, spread, conversion, and any account charges on the firm’s schedule. The lines differ by firm. | The holding can fall. Settlement timing can limit what you can sell or reuse. Rules are not the same in every country. | Not inferred. The firm and your country decide who may open the account. |
| Margin account | Whatever the margin agreement and the permissions allow. A margin account is not a promise of every listed product. | Borrowing or margin can be available. Buying power is the firm’s figure, not a standard multiple. | Initial and maintenance levels are in the agreement. Interest or financing can apply to a debit. | The cash-account charges, plus financing on borrowed balances where the product is a loan. | Losses are larger relative to cash. The firm can sell collateral if requirements are not met. This page does not calculate that point. | Not inferred. Approval, experience questions and country rules are the firm’s. |
| Futures trading account | Listed futures the firm and the exchange actually carry. A chart of an index is not that contract. | Collateral supports a larger contract exposure. That is leverage, even when nobody calls it a loan. | Initial margin opens the position. Variation margin moves with daily settlement. House margin can exceed an exchange minimum. | Commission, exchange fees, clearing fees and regulatory charges can sit on different lines. | The loss can exceed posted cash. Contracts expire. Some can go to delivery if you hold them. | Not inferred. Futures permission is separate from a cash share account. |
| Options trading account | Calls, puts and multi-leg strategies the approval actually allows. Short options create obligations. | Long premium is a defined cash outlay. Short options and some spreads use margin. | Short-option margin is an obligation calculation, not the premium you received. | Commission per contract, exchange fees, and exercise or assignment charges where the schedule lists them. | A long option can expire worthless. A short option can be assigned. Early assignment exists on some contracts. | Not inferred. An options approval is not granted by opening a share account. |
| Forex trading account | Pairs the firm quotes. A pair is a base currency priced in a quote currency. | Retail leverage caps exist in some countries and not in the same form in others. | Margin is collateral on the contract. Rollover or financing can apply overnight. | Spread, commission, conversion and financing are separate. A tight spread at a quiet hour is not the spread at a data release. | A small price move is a large cash move when exposure is a multiple of equity. The provider can be the counterparty. | Not inferred. Product rules and leverage limits follow the entity and the customer’s country. |
| CFD or spread-betting account | Contracts the provider writes. They are not the share, the future or the commodity. | Margin is typical. Caps for retail customers depend on the regulator of that entity. | The provider sets collateral and can close positions under its terms. | Spread, commission and overnight financing can all apply. A zero on one line does not clear the others. | You have a contract with a counterparty. If the firm fails, the claim is not a share at a separate custodian. | Not inferred. Some countries restrict or prohibit the product for retail customers. |
| Demo or paper account | Whatever the simulator includes. A missing contract in the demo can still exist live, and the reverse is also true. | Any leverage in the demo is simulated. | A simulated margin call is not the live firm’s rule. | Quoted costs in a demo can ignore the spread you would actually cross, or the queue you would actually join. | Fills, slippage and liquidity are assumptions. A profit in the demo is not evidence about a live account. | Not inferred. A demo does not prove you would be accepted for a live account. |
| Professional or institutional account | Access can be wider. It can also drop retail protections, leverage caps and disclosure duties. | Leverage limits that apply to retail customers may not apply. | Terms are negotiated or set out in a professional agreement. They are still the firm’s terms. | Pricing can differ. A lower headline charge is still not the whole bill. | You may lose retail complaint routes or compensation eligibility. Read the classification before you ask for it. | Not inferred. Tests look at experience, size or work. Meeting them is not a recommendation to opt out. |
On a small screen the table scrolls sideways. The cards above carry the same points.
Four account figures every trader should understand
These four numbers answer different questions. Cash is not equity. Equity is not the size of the position. Buying power is not a number this page derives, because the firm defines it.
Cash$12,000Shown as settled cash in this illustration.
Equity$11,400After a hypothetical open loss. Not the same as cash.
Notional$40,000Size of one hypothetical position.
Buying powerFirm-definedNot calculated here. A screen might show a figure this lesson will not invent.
Cash balance
Cash the account statement shows under its own rules. Settled and unsettled cash are not always the same spendable amount.
Account equity
A net figure after positions and amounts you owe. Names vary: net liquidation value is one of them. It is not the cash balance.
Position notional
The economic size of a position. For a simple share it is price times quantity. For a contract it follows the contract’s multiplier.
Buying power
The room the firm says you have to open more exposure. It is defined by that firm’s rules. It is not cash, and it is not equity.
Account exposure explorer
Effective leverage in this illustration is notional divided by equity. A price move changes the position by notional times that percentage, with the sign flipped for a short. Fees are then subtracted. The result is teaching arithmetic.
- Effective leverage
- 4.00×
- Price-movement result
- -$800.00
- Fee impact
- $0.00
- Result after fees
- -$800.00
- Equity after the illustration
- $9,200.00
- Change versus starting equity
- -8.00%
A positive market move means the price rose. On a long position that increases the result. On a short position it reduces it. The default is equity of 10,000 against notional of 40,000, which is 4 times, and a 2 percent fall. That fall is an 800 loss and 8 percent of starting equity before fees. This is not a brokerage margin calculator and it does not produce a liquidation price.
The futures margin and currency position tools exist in the library and are linked when those routes are public. The public position size calculator and profit and loss calculator use inputs you type. They do not know a firm’s close-out rule.
Can you actually trade the product you want?
Four facts get collapsed into one advertisement. The firm mentions an asset class. The firm offers a specific instrument. Your account has the approval. The product is lawful for you where you live. Any one of the four can fail while the other three hold.
Gold
A firm can offer gold futures, gold CFDs, or a gold ETF or ETC. Those are different claims. Advertising gold does not mean all three are on the account.
Indices
An index level, an index future, an index CFD, an ETF and an index option can share a name and still be different instruments.
Options
Some accounts need a separate approval before a call or a put can be traded, and a further step before an option can be sold short.
Futures
Exchange access and the contract list vary. Permission for shares does not include a futures contract.
Forex
The contract, the leverage cap and whether the firm is your counterparty depend on the entity and the country. A pair ticker does not settle that.
What does it really cost to use a broker?
Not every line applies to every account. A cash share trade may have no overnight financing. A futures trade can have exchange and clearing fees a CFD schedule does not use. An inactivity fee applies only if the firm charges one and the condition is met. Read the schedule for the account, then add the lines that match how you would trade.
The research note What a headline commission leaves out of the bill separates the commission from the rest of a hypothetical stack. A lower commission is not, by itself, a better or safer account.
Per trade
Commission, a minimum commission, exchange fees, clearing fees and some regulatory charges are tied to the transaction.
In the price
The bid-ask spread is a cost of crossing. It does not appear if you only read the commission line.
Ongoing
Platform subscriptions, market data, inactivity fees and financing on a debit or an overnight derivative can recur.
Conditional
Currency conversion, withdrawal charges, transfer-out fees and borrow fees apply only when that event happens.
Understand the cost of a trade
- Total commission
- $4.00
- Spread cost, counted once
- $10.00
- Other charges
- $2.00
- FX conversion
- $0.00
- Total modelled cost
- $16.00
- Cost versus notional
- 0.16%
Enter the spread only as an extra cash cost. If the prices you used already include the bid-ask gap, leave the spread at zero so it is not counted twice. The default is a 10,000 notional, 2 to buy, 2 to sell, 10 of spread and 2 of other charges, which is 16. These are modelled figures, not a provider’s current tariff.
How to verify a trading broker
Start with the legal name in the agreement. Find that name on the register run by its regulator. Read the status, the permissions, and any restriction. A number printed in a brochure is not a substitute for the register. This page does not look up a firm, and typing a number here would not verify it.
Clone firms copy a genuine name. Match the registered address and the firm reference, not only a similar word. Country-specific agreements matter because the entity that serves one country may not be the entity that serves another. A website is not permission to open an account.
- FCA Financial Services Register
The UK register of firms and individuals. Also reached from the FCA’s own firms page.
- FCA firms page
The FCA’s public page that points customers to the register.
- Investor.gov
The SEC’s investor-education site, including material on checking registration.
- FINRA BrokerCheck
A public lookup for many US broker-dealers and registered representatives.
- NFA BASIC
A public lookup relevant to futures and some retail forex and swap registrations in the United States.
- ESMA
The European authority. National registers remain the place to look up a specific firm.
- ASIC
The Australian commission. Use the registers ASIC publishes, not a logo on a brochure.
- FSCS
The UK compensation scheme. Coverage depends on the claim, the activity and the firm.
- SIPC
A US protection scheme for missing customer securities at a member broker. It is not a hedge against a falling market.
The US Securities and Exchange Commission publishes investor material at sec.gov. National EU registers, not only ESMA’s site, are the lookup for a specific European firm. WiT Markets has not performed a current check of a provider because you are reading this page.
What happens to cash and investments held through a broker?
Custody is who holds the security. Client-asset and client-money rules, where they apply, are meant to keep customer property apart from the firm’s own property. Clearing arrangements decide who the clearing house faces. Cash can be a deposit at a bank in the firm’s client-money pool, or a different claim. The agreement and the client-asset statement are the sources.
Authorisation does not decide the direction of a price. Compensation schemes, including the FSCS in the UK and SIPC in the United States, have eligibility rules, limits and exclusions. They are not a general promise to repay market losses, and they do not treat every product the same way. Coverage depends on the entity, the customer’s classification, the account, the jurisdiction and the kind of claim. This page does not turn a balance into a compensation figure.
What to check before funding a trading account
- 1
Select the legal provider named for your country, not only the brand.
- 2
Confirm that you and the account type are eligible where you live.
- 3
Read the customer agreement far enough to see who the contract is with.
- 4
Complete identity checks and any suitability or appropriateness questions the firm is required to ask.
- 5
Apply for the instrument permissions you actually need.
- 6
Read the current fee schedule, including conversion and financing.
- 7
Check deposit instructions against a channel you reached independently.
- 8
Read how withdrawals work, how long they take, and what they cost.
- 9
Turn on the security controls the firm offers before you fund.
- 10
Keep the agreement, the statements and the permission confirmations.
Account security and operational risk
Multi-factor authentication
Prefer a second factor the firm supports. Do not type that code into any site other than the firm’s own login.
Official channels
Reach the login from a bookmark or the firm’s own site. A search advert and an email link are weaker.
Phishing
A message that creates urgency and asks for a password, a code, or a new payee is a reason to stop and open the account yourself.
Withdrawals
Confirm a new bank account inside the broker’s own secure area. WiT Markets does not take those details.
Recovery
Store recovery codes where you would store any other key. The firm’s process, not a chat window, is the route back in.
Devices
Review the device list the firm shows, and remove a device you no longer hold.
Outages
A platform that is down is an operational fact. It is not, by itself, a filled order or a cancelled one. Read the ticket status.
Confirms and statements
Match the fill and the fee to the confirmation. A statement you never open cannot show a charge you did not expect.
Complaints
Use the firm’s complaint process, then the scheme named in the agreement if the firm does not resolve it.
Compare two trading account offerings
Use this for two hypothetical models, or for notes you have already taken from documents. It does not load a provider’s prices. Educational comparisons on this page are separate from the provider records elsewhere on the site. Where a public directory exists, it is linked below. Missing fees are left blank rather than shown as zero.
What the two records show
- Account types
- Cash account compared with Margin account.
- Instruments
- One or both instrument names are blank.
- Commission models
- A not entered / B not entered
- Sum of spread, FX and platform fee
- A incomplete / B incomplete
- Margin notes
- Not recorded / Not recorded
A blank charge is not zero, so an incomplete side has no total. Nothing here is a live tariff, and neither account is marked safe. Still read the agreement, the register entry and the instrument list. Notes you type stay in this browser tab and are not sent to WiT Markets.
Before you open or fund an account
Mark items you have actually reviewed. The list can be copied, printed or reset. It is not saved, and a complete set of ticks is not a statement that a firm is approved.
0 of 10 marked. A tick is your own note. It does not mean the check was correct, and it is not stored on a server.
Common mistakes and warning signs
Funding the logo
The brand on the app is not the company on the agreement. Open the legal name before you send money.
Treating a low commission as the bill
Spread, conversion, data, financing and exchange fees can exceed the commission line.
Assuming the product is on the account
An advertisement for an asset class is not permission, and permission is not the specific contract.
Using demo fills as evidence
A simulator does not join the live queue and does not prove a live cost.
Asking to be classed as professional for the leverage
The classification can remove protections. It is not an upgrade in safety.
Reading compensation as price insurance
Schemes address certain firm failures. A market loss is a different event.
Sending a deposit to details from a message
Deposit instructions belong to the account you opened, checked in the firm’s own channel.
Comparing two brands without the entity
Two accounts can share a marketing name and still be different companies, products and protections.
Worked examples
Cash and margin, same price move
Assume a 10,000 cash purchase of shares. A 2 percent fall is a 200 loss, which is 2 percent of the money spent. The same 10,000 of equity supporting 40,000 of exposure is 4 times leverage. A 2 percent fall is then an 800 loss, which is 8 percent of that equity, before financing and before fees. The margin version can also charge interest on a debit. The cash version does not create that interest. Both can lose money if the price falls. The leveraged version loses more of the equity for the same price move.
A future and a CFD on the same name
An exchange-traded future is a standardised contract, cleared, with daily settlement, an expiry, and fees that can include the exchange and the clearing house. A CFD on a displayed price of that future is a contract with the provider. Its price, margin, financing and close-out follow the provider’s terms. It does not expire just because the future does, unless the CFD says so. The regulator is the regulator of the entity that issued the CFD, which may not be the exchange’s regulator. Neither product is priced on this page.
One fictional brand, two companies
Using the Northwind example, a customer in one country signs with Northwind Markets Ltd. A customer in another signs with Northwind Markets Inc. The apps look alike. The agreements do not. Complaints, compensation and the product list follow the company named on each agreement. No real group is described by this example.
A small commission and a larger bill
A hypothetical stock round trip has 2 of commission to buy and 2 to sell. The spread costs 10 in cash, and other charges are 2. Counted once each, the economic cost is 16, against a headline commission of 4. If the spread had already been inside the prices, adding 10 again would double-count it. The cost explorer uses that rule. It is not a tariff.
Check your understanding
Ten questions on the distinctions in this lesson. A correct answer is not a certificate and it does not approve an account.
Explore trading account providers
These are existing WiT Markets pages. A link is not a ranking and not an endorsement. Directories that are outside the public set are omitted rather than shown as unavailable buttons. Provider fees that the site has not verified are not filled in here.
- MarketStock marketsHow listed shares trade. This is market structure, not a ranking of stockbrokers.
- MarketCommodity marketsHow commodity exposure is packaged. A product page is not a broker’s contract list.
- ResearchBroker and platform intelligenceHow WiT Markets writes about platforms, without a recommended provider.
- ResearchThe legal entity on the contractThe research note on the firm you have, the permissions and the protection limits.
- ResearchWhat a headline commission leaves outA worked cost stack. The commission line is one segment of it.
- ResearchEligibility is not a websiteA public site is not permission to open an account in your country.
- GuideFeesThe charges guide beside this lesson.
- GuideOrder typesThe previous step in the current foundations pathway.
- GuideTrading basicsHow a trade is planned before a firm is chosen.
- GlossaryBroker: definitionThe short glossary entry. This lesson is the longer guide.
- ToolPosition size calculatorA cash risk budget. It does not know a firm’s margin rule.
- ToolProfit and loss calculatorHypothetical price results. Not a broker statement.
- DirectoryTrading softwareSoftware directories. A platform is not the broker and not the venue.
- PolicyCommercial disclosureHow affiliate relationships are handled. They do not decide the analysis on this page.
Where this sits in the pathway
You should be able to name the firm, the account type, the instrument, the cost lines that apply, and the register you would check. The previous step is Market orders and execution. The next step is Commissions, fees and slippage. The pathway home is Trading foundations.
Lesson progress
Progress loads in this browser. The mark uses the same local list as Trading foundations. It is not uploaded and it is not a certificate.
Questions readers ask
What is a trading broker?
A broker is a firm that gives you access to a market under a client agreement. In listed markets it is often your agent. In many OTC contracts it is the counterparty. The legal entity on the agreement decides the regulator and the protections, not the logo.
What is a brokerage account?
It is the legal and operational container for cash, positions and permissions at a named firm. The platform is how you see it. The account type decides what can be held and whether margin is involved.
How does a cash account differ from a margin account?
A cash account funds purchases with cash. A margin account can involve borrowing or collateral for a larger exposure, with financing and the risk that the firm sells positions. Exact rules depend on the firm and the country.
What should you check before funding an account?
The contracting entity, the official register, the permissions, the instruments, the fee schedule, how deposits and withdrawals work, and the security controls. A tick on a checklist is not evidence that those checks were done correctly.
Does a low commission mean a cheaper account?
No. Spread, exchange and clearing fees, conversion, data, financing and withdrawal charges can exceed the commission. Compare the lines that apply to the way you would actually trade.
Does regulation mean the account cannot lose money?
No. Authorisation is about the firm’s permission to carry on activities. It is not a promise about prices. Compensation schemes, where they exist, address certain firm failures and do not insure ordinary market losses.
Why can two accounts under one brand differ?
A brand can be used by separate subsidiaries. Each can have its own regulator, products and agreement. The customer agreement identifies the provider for that account.
What is a demo trading account for?
It lets you learn the ticket with simulated money. Fills, slippage and liquidity can be assumptions. A demo result is not a live record and does not prove you would be accepted for a funded account.
Sources and review
Register and scheme links above point at the organisations’ own sites. They are not an endorsement of this lesson, and they are not a live authorisation check. Hypothetical figures are labelled. Provider records elsewhere on the site are not copied into a second database here.
Written by: WiT Markets Editorial. Writes and structures WiT Markets pages. Separates a sourced fact from a cell that is Not confirmed.
Review: Editorially reviewed. This is not a qualified specialist review and it is not a legal sign-off.
Last reviewed: . Next review due . The date is an editorial pass. It is not a live check of every third-party fee.
Regulatory and official sources
- Financial Conduct Authority — checked 13 October 2026
- U.S. Securities and Exchange Commission — checked 13 October 2026
- FINRA — checked 13 October 2026
- Investor.gov — checked 13 October 2026
- Australian Securities and Investments Commission — checked 13 October 2026
- European Securities and Markets Authority — checked 13 October 2026
- National Futures Association — checked 14 October 2026
- Financial Services Compensation Scheme — checked 13 October 2026
- Securities Investor Protection Corporation — checked 13 October 2026
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