Dealer

A Dealer is an individual or company that buys and/or sells financial instruments for their own account - as a principal to the transaction. Contrast this against a broker who acts as an agent to the securities transaction that takes place.

Dealers therefore expose themselves to the inherent risks of holder the underlying securities that they transact in and are attempting to make a profit in these by buying low and selling high even if their hold time is very short - sometimes measured in seconds. Brokers, on the other hand make their money by charging commission to the trader.

Some who acts as both a broker and a dealer is know as a Broker-Dealer.