Buy side execution trading vs IB market making
What are the differences between buy side execution trading vs sell side market making? It seems like these roles are very similar and very different to buy side PM/investment analyst role?
I am not quite sure why being a sell side trader is more relevant to becoming a buyside PM then an execution trader on the buyside?
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This is how buyside execution trader works.
PM tells trader i want x amount of the CVX '46s bonds.
Trader contacts brokers and picks the best price then executes.
There is no idea generation no trading for profit on the books. That is why it is generally harder for buyside execution trader to move to PM
I have really tried to work out how this is different from a sell side trader (and not just in cash equities)? Theres not much information thats clear to me online as to how its different
Sell side trader decides price on what theyre willing to buy/sell and they make money based on the spread. I.E. xyz '26 bond have bid/ask of T+25/T+30 which is a 5bp spread. The spreads will depend on names/supply demand and macro economic factors. some bonds will have wide spreads while others will be very tight. This is akin to a risk free arbitrage. Sell side trader may get a request to sell 100M YZ bond while at the same time getting a request from different client to buy 100M YZ bond. trader needs be able to make a profit off those 2 trades, if the trader does not then he will be out of a job..
Above explanation is the only method another good example is how GS trader tom malaforte made 100M in a few months link below
http://www.zerohedge.com/news/2016-10-19/how-34-year-old-goldman-trader…
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