What do brokerage firms do?
Off the top of my head, a broker: While there are stock exchanges that offer direct market access (DMA), they (nearly) always want a broker as well to back the first two points I made.  In that case the broker merely routes your orders directly to the exchange and acts as a custodian, but of course the details heavily depend on the exchange you're talking about. This might give you some insight: Direct Market Access - London Stock Exchange You can get direct market access (DMA) but you have to pay for data, as this is part of the exchanges data plan, and there are plenty of other fees that are passed straight down to you. Your clearing firm also has fees that are passed on to you. In general you are looking at $150 a month on the low side, in data and software fees. If you wanted pure access, NASDAQ alone charges $6,000 a month last I checked. The different routes data routes to the exchange all have different rules, and they give you rebates for some kinds of orders in some conditions.  Brokers nowadays usually assume this responsibility (including collecting the rebates lol), at the very least, and charge an average price for routing your orders, a price that fits into their business plan and their target audience. Hope that helps.
Your original example is a little confusing because just shorting for 1k and buying for 1k is 100% leveraged or an infinitive leverage ratio. (and not allowed) Brokerage houses would require you to invest some capital in the trade.  One example might be requiring you to hold $100 in the brokerage.  This is where the 10:1 ratio comes from. (1000/10) Thus a return of 4.5% on the 1000k bond and no movement on the short position would net you $45 and voila a 45% return on your $100 investment. A 40 to 1 leverage ratio would mean that you would only have to invest $25 to make this trade.  Something that no individual investor are allowed to do, but for some reason some financial firms have been able to. "I work for an international real estate consulting firm in Shanghai. After graduation I worked in their Research Department for two years before switching to Commercial Brokerage 3 months ago.  Since my background was in Economics, I had to learn a lot about how the industry worked. I found this book to be very helpful:  ""Commercial Real Estate Analysis &amp; Investments"" by David Geltner.  I will admit that it's probably more than what you want to know, but it seriously gives an in depth breakdown of the entire industry.   About one year into starting, a major Real Estate iBank commissioned our company to due diligence on an office building acquisition in Shanghai. I was the only person capable of doing it as everyone else was either busy or couldn't speak English properly. With 1 year under my belt in Research and that book, I took the entire thing on. Had to walk into that meeting by myself with all the big wigs from New York, London, Hong Kong and Shanghai questioning every single number and assumption. I fucking nailed it. While credit towards understanding the market through work is deserved, a lot of the development of that report came from constantly consulting that book. It's worth every penny if your interested in commercial real estate investment.  That being said, if you want to track deals, the best place is called Real Estate Capital Analytics. Unfortunately you have to fork over a decent amount of cash to get access. For your situation I would recommend the following:  - ""The Urban Land Institute &amp; PwC Emerging Trends in Real Estate"": I believe you need to be a member but I can always find it online for free.  - Brokerage firms: I work in one and we cover residential, commercial and retail reports on cities throughout the world (I actually wrote the ones for China for two years). You can find a wealth of information in them. If you are seriously looking at buying with capital, call up the research department and ask if they have some time to discuss the market face to face; if you don't have capital, they won't talk to you. Fortunately however, most let you download their reports for free from their website so here's the list of the major ones in the US: CBRE, Colliers, CRESA, Cushman &amp; Wakefield, Jones Lang LaSalle, etc.  - The Loop - www.loopnet.com has a wealth of information from Commercial properties on the market to previous deals.  Please let me know if I can further advise." Re #2, consider an account at a credit union rather than a bank or brokerage firm. Whether you choose a savings account or a money market account, you're likely to get an account with lower fees (so it doesn't cost you money), and rates that are typically similar. "But, wait! There's more!     [Exhibit A](http://www.reddit.com/r/dogecoin/comments/1z8khe/i_am_a_film_producer_looking_to_fund_an_indie/) &gt;I am a film producer looking to fund an indie grand slam with doge, any takers?  &gt;Yes, I was a student at the very prestigious fsu school of film where thousands apply and 30 get in. I've worked on over 15 shorts and was asked to co-produce this with an agent who was a classmate of mine. This is the real deal. We have a trailer but will not show it unless we know your what we call a ""qualified"" investor. This means you can afford to invest in the film and you're not mortgaging your house to do it.     [Exhibit B](http://www.reddit.com/r/finance/comments/21voeu/looking_for_bond_tradersbroker_in_south_fl_with/) &gt;We are a broker/dealer in south FL looking for traders/brokers of debt securities (preferably muni's) Email resumes to: Tyagman@gmail.com  &gt;Because I'm not giving out my firms email unless I get a legit resume you prick. We've been around for 20 yrs. and claiming your a market marker in your user name just makes you more of a prick; prick.     [Exhibit C](https://gust.com/companies/oddlotbonds) &gt; We are a bond trading broker/dealer located in Aventura, FL. Our ability to specialize in the niche sector we do business in has allowed us to produce very agressive returns annually for over 15 years. We are looking to expand and make this a mid-sized firm and restructure into a fund. We currently do business with high net worth individuals and all top 20 investment banks, retail brokerage firms and liquidity houses.     [Exhibit D](http://www.reddit.com/r/finance/comments/2eh4sw/i_work_at_a_boutique_bd/) &gt;I'm a risk on us debt trader but because I also went to a top film school they want me to get creative and come up with a few ideas of how they can be more innovative and spread they're tentacles.     **--- UBS Comment Due Diligence Quant**" The question seems to be from the point of view actual sales and not its impact on one's taxation. In case you just want to sell, why brokers will respond differently each times. Either there may be issues with ownership and/or the company whose shares it is? In case you feel that the issues lies with brok I work for a Big4 and there are no shared audit and consulting clients. We go through pretty extreme independence controls to make sure we don't even have personal relationships with clients. I know people who had to refinance their house because the mortgage company became an audit or consulting client.  It's a common misconception that big4s audit and provide consulting services to the same firm, but this is not true. It's not like there's a shortage of fiduciaries out there. If someone wants to pay a brokerage fee rather than a fiduciary fee, I don't see why they should be compelled to. A fiduciary duty is expensive, and will likely raise costs.  If the problem is that people don't know whether advisors are fiduciaries, then it's a disclosure problem. But by closing the short position the broker would still be purchasing shares from the market no? Or at least, someone would be purchasing the shares to close the short position. So, why doesn't the broker just let Client A keep their short position open and buy shares in the market so that Client B can sell them...I know it sounds a bit ridic, but not much more so to me than letting Client A borrow the shares to begin with!