If you're interested in finance or are just starting to learn about this world, you've probably heard about brokers. But what exactly are they? Are there different types of brokers? How does it work if it's an international broker? What's the difference with a trader?

In this article, we provide a complete guide so you won't have any doubts. And don't worry, we keep it simple

What is a broker?

A broker is a registered company, platform, or person that acts as an intermediary between you and a specific market. Its main function is to facilitate the buying and selling of financial assets, such as stocks, bonds, cryptocurrencies, currencies (Forex), commodities, among others.

In simple terms, a broker allows you to access markets you wouldn't be able to reach on your own. For example, if you want to buy shares of a company listed on the U.S. stock exchange, you can't do it directly: you need to use a broker that has access to that market.

Difference between a broker and a trader

Often, the term “broker” is confused with “trader”. While these are two important categories of actors in financial markets, there are major differences between them and it's key that you know them

• The trader is the person who trades in financial markets to buy and sell assets on their own. They use the broker's platform or services to carry out their transactions. They can trade on their own behalf or on behalf of an institution, such as a bank or an investment fund.

• The broker, on the other hand, is the intermediary that allows you to access financial markets. It can be a company or a platform that executes its clients' buy or sell orders.

In short, the broker is the tool (the gateway to the markets) and the trader is the person (investor) who makes the buy and sell decisions

What are the different types of brokers?

The broker offering is broad and it's important to keep in mind that there are different types: with diverse products and specialties that may align more or less with your profile. To give you an idea, below we present a list of some available types of brokers available:

1. Stockbroker: buys and sells shares on behalf of investors.

2. Forex broker: allows trading in the foreign exchange market, where foreign currencies are bought and sold (for example, USD, EUR, JPY).

3. Futures broker: offers the possibility of trading futures contracts in organized markets.

4. Options broker: simplifies the trading of options contracts, which give the buyer the right, but not the obligation, to buy or sell an asset at a specified price in the future.

5. Commodities broker: specializes in the buying and selling of commodities such as gold, silver, oil, and other natural resources.

6. Cryptocurrency broker: allows you to buy, sell, and exchange digital assets such as Bitcoin (BTC), Ethereum (ETH), USDT, and many other cryptocurrencies. They often offer additional services such as secure storage and advice on digital assets.

How to choose a reliable broker?

When choosing a broker, it's key to consider several factors. The first and most important is to get informed and consult with professionals. Beyond that, here are some relevant tips:

• Check whether it's regulated: a broker must have a specific license issued by a financial regulatory body that authorizes it to carry out such activity (like the CNV in Argentina). This gives you peace of mind that the broker is authorized and follows transparency and security standards.

• Review the fees: brokers usually charge commissions for each transaction you make. Check the fees you would have to pay, evaluate the prices, and the profitability of the transactions.

• User reviews: read reviews and comments from other users who have already used the platform. This can give you an idea of the real experience people have.

• Security measures: verify that the broker offers security measures, such as two-factor authentication (2FA) and data encryption.

 It is essential to make sure that the broker is properly regulated by the relevant financial authorities and complies with current regulations. It is also crucial that you take into account your responsibility in meeting tax obligations. To ensure everything is in order, we recommend consulting with an accounting or tax advisor.

How to fund a broker abroad?

There are several ways to deposit money into an international broker from Argentina. Among them, there is the possibility of doing it through a virtual wallet like belo, which allows transfers to more than 50 countries with your pesos or cryptocurrencies. When making the transfer, the funds are automatically converted to the local currency of the recipient account. 

In the case of a broker in the United States, for example, you would first need to verify that it has the possibility of making a deposit via ACH (the type of transfer that belo allows to send dollars to accounts in the U.S.).

Once that's done, and assuming that you already have pesos or crypto in belo, follow this step by step:

• Go to the deposit or funding section of your broker account.

• Select the option to transfer funds via ACH.

• The broker should provide the details needed to make the transfer: routing number (bank code) and account number.

• Copy this data and go to the belo app.

• On the main screen, select the option to Transfer > International > United States.

• Enter how much you want to transfer and view the exchange rate.

• Fill in the recipient's details (your details, in this case): email, address, ID document…

• Then, enter the recipient account details (the broker's) and confirm the transaction.

The process does not include fees, but it does have a USDT to bank USD conversion value that you'll be able to see on screen at all times. If you want to learn more about belo's international transfers, I'll leave you this link

How to transfer dollars abroad from Argentina: simple guide

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(*) The information provided in this article is for informational purposes only and should not be interpreted as legal or tax advice, nor as professional tax advice. We encourage all belo users to seek appropriate advice in order to comply with the regulations and rules that apply to them.