I'm new to finance, thus please fix me if i misunderstand something.
As far as i know, one can get an account on a brokerage firm, and have ability to trade on multiple exchanges. Good use case for that is for example if there is a volume available for your trade on multiple exchanges you just put one order which might be broken down to several other orders and sent simultaneously to target exchanges using best opportunities.
Each exchange is exposing an api and has its account system, so that an account on an exchange is executing a trade then it shall have enough assets for that.
So i want to understand how does the brokerage work? does it hold accounts with lot of assets on each exchange then execute trades on demand just predicting optimal amount of assets to be held on each exchange? or there is some other mechanism for this to work?
Another option i can think of is if there is a trust between exchanges to the brokerage so that if the firm sends an order to exchange it assumes that brokerage holds assets required for that...