A dealer is a financial institution working with their country’s regulatory body to trade foreign currencies. Most dealers are banks who trade securities on their own behalf and in such large amounts that they help maintain liquidity in the market and regulate bid and ask quotes.
What’s the difference between a dealer and a broker?
The main difference between a dealer and a broker is who they execute trades for. While a dealer executes trades for themselves as a financial institution, a broker executes trades on behalf of others, typically individual clients. Dealers have more freedom when buying and selling securities while brokers are bound to only making purchases requested by their clients. When a person or firm executes trades both for themselves and for clients, they are known as a broker-dealer.