Definition of Two Dollar Broker

Two dollar broker is an independent exchange member who executes orders for commission house brokers and other customers, for a fee.

Applying "Two Dollar Broker" to Securities Exams:

The term two dollar broker came about as a result of the commissions that the independent exchange members would charge to execute an order for their clients or commission house brokers. These brokers would generally charge $2 for every 100 shares contained in the order. As new trading platforms and technology have advanced these fees have been reduced dramatically

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