PRACTICAL GUIDE
Explained concepts, worked cases and practice to test your understanding. Numerical examples are hypothetical; replace assumptions with your instrument specifications.
The essentials
A broker provides access to financial products. For forex or CFDs, also identify your counterparty, order execution and signed contract. The trading brand and legal entity can be different.
Understand the mechanism, not just the definition
The word broker describes a commercial role, not the complete transaction structure. A share purchase may involve an intermediary, venue and custodian; a CFD contract identifies its counterparty and settlement method. The platform is only the interface. Separating these layers prevents software from being credited with contractual protections and price exposure from being confused with ownership.
Example and verification
Imagine two accounts using the same application. One offers a share CFD; the other allows you to buy the share. The chart does not determine ownership, rights or costs: the contract and specifications do.
Worked case, step by step
A screen shows 10 units of a company. For shares, check custody and ownership rights. For CFDs, find the multiplier, financing and adjustment rules. The same price movement can produce different outcomes because of commissions, conversion and settlement. A symbol name alone cannot complete the product record.
What to verify when applying this
Start with product and entity, then platform, total costs and withdrawals. Record anything undocumented. Awards, followers and commercial links do not replace these checks or guarantee acceptance of your residence.
Practice: verify it in your environment
Learn by observing the process and keeping its data. Complete this practice in demo or using documentation, without sending real orders or adding capital for the exercise. Record differences between the example and your account specifications.
- Complete four columns: product, contracting entity, execution, and custody or settlement.
- Locate these answers in the contract and instrument specifications; retain their date and URL.
Test your understanding
Try the question before revealing the answer. Justify the conclusion and its assumptions rather than memorizing a number.
Does using the same platform mean contracting the same product?
Reveal the explained answer
No. Check the product, entity, custody or counterparty, and specifications. The application’s appearance establishes none of these conditions.
Sources for further learning
Consult original documentation to check units, features and terms. Your account specifications take precedence over examples in this guide.
