I understand that some desks, particularly in fixed income, rely a lot on franchise value. Can someone explain to me what this means and what are the examples of such desks?
what's the flipside? Is it desks that take prop risk?
WSO Virtual Bootcamps See all
Career Advancement Opportunities
March 2023 Investment Banking
Overall Employee Satisfaction
March 2023 Investment Banking
Professional Growth Opportunities
March 2023 Investment Banking
Total Avg Compensation
March 2023 Investment Banking
Career Resources
Leaderboard See all
| 1 | | 99.2 |
| 2 | | 99.0 |
| 3 |  | 99.0 |
| 4 |  | 99.0 |
| 5 | | 99.0 |
| 6 | | 98.9 |
| 7 |  | 98.9 |
| 8 | | 98.9 |
| 9 | | 98.9 |
| 10 | | 98.9 |
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Comments (3)
Take for example a high yield trading desk. The "franchise" desks like JP Morgan, GS, MS, etc. will generate substantial P&L from flow trading (crossing risk). This does 2 things: (i) it allows the desk to meet P&L targets without having to put too much balance sheet to work (taking risk), and (ii) it allows those banks to take risk knowing that a few trades blowing up wont blow a hole in the P&L. A desk that doesn't get much flow has to put more balance sheet to work to generate P&L. Having large dealer inventory and being able to cross risk (you are one of the go-to desks for the buy-side to work with) creates a strong flow franchise that smaller desks can't really compete with.
Agree with above but also liquidy. Your flow might help you be able to put positions on size without "fighting the screen"
Ipsa nobis soluta aut laudantium architecto ut. Repellat magnam dolorum minus numquam nostrum incidunt dolores. Reiciendis facere alias delectus omnis ut consequatur praesentium veniam. Similique perspiciatis voluptates sequi nisi autem. Et et nostrum voluptatem exercitationem voluptatibus voluptas est.
Rerum ea consequatur dolorem aut rerum dolorum. Eius odit repellat sit eaque et voluptate. Velit omnis consequatur minima facilis aut porro consequatur. Et voluptatum praesentium in illo sit praesentium.
Eligendi sit corporis officiis. Fugit consequuntur aspernatur sunt. Impedit iste recusandae qui commodi nulla dolores ipsam. Perspiciatis magni a non libero est nesciunt distinctio.
Autem dolores praesentium aspernatur consectetur. Labore voluptatem qui nostrum aut nihil illo. Veritatis exercitationem animi voluptas. Aperiam nihil voluptatem sit doloribus sed esse distinctio voluptatum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...