agency means someone is just acting as an agent or broker for the trade- they’re not the other side, they’re not selling you what you’re buying. they are buying them from some other dealer and selling them to you. principal is out of someone’s own inventory- so they actually own it and are selling it to you. agency trades you normally get charged a commission, principal trades usually get marked up (make $$ on the spread they quote you)
thanks for your feedbacks, this is a very helpful thread!