What defines the job of a trader in comparison to a broker?

The distinction between the roles of a trader and a broker is pivotal in understanding their respective functions within financial markets. Traders buy and sell securities or commodities for their own accounts, making decisions based on market conditions, price movements, and their own investment strategies. This contrasts with brokers, who act as intermediaries for clients, executing trades on their behalf and earning a commission for their services. Brokers facilitate transactions and do not take a position in the market themselves; instead, they follow the instructions given by their clients.

The other definitions provided do not accurately capture the fundamental difference. While risk management is an important part of traders' roles, it does not define their primary function compared to brokers. The statement about traders executing trades based on others’ instructions mischaracterizes their independent decision-making role. Lastly, both traders and brokers often require licenses to operate, but this similarity does not highlight the core difference in their operational roles. Hence, the correct understanding focuses on the perspective that traders operate independently for themselves, while brokers serve clients.