Broker-Dealer

A broker-dealer is a brokerage firm with a license from the SEC that enables its employees to execute trades on behalf of its clients and the firm. Brokers handle buy and sell orders placed by individual and institutional clients and make money by charging a commission, or sales charge, for doing business on the client's behalf. Dealers execute orders for their own accounts or the firm's account. The spread, or difference, between what dealers pay for a security and what they receive when they sell it is how they make money.

Scottrade is a discount broker, which means the firm charges a very low commission for completing your orders.