Ethic: agency trade and principal trade agency, through, between, principal

jcfa2011

by any chance, client directed brokerage most happen with pension fund through principal trade?

or is there any relationship between client directed brokerage with principal trade? Thanks.

benbenxiong

Thanks! That was simple.

That means the broker takes the risk on his balance sheet when he is doing a principal trade and hence he should think of doing wrong things which will benefit his principal trades rather than agency trades. Correct?

random_walker47

Can someone explain in simple terms what is the difference between the two? Which one would a broker prefer?