Where does the revenue come from?
Trading noob here so bare with me.
Do sales and trading departments at BBs make their money from:
a) executing transactions for clients and taking a percentage (e.g. client asks to buy stock A, S&T buy for price X and charge them X + a few bips)
b) client asks S&T to buy stock A, S&T quote him price X (includes risk), and S&T tries to get it for a lower price, keeping (or absorbing) the difference
c) combination of the two
d) neither of the two
Thanks
combo of the 2... a is an agency trading where shares are purchased on behalf of the client through an exchange and client is charged a commish (depending on stock liquidity and size) b is an example of a principal trade where bank can either take the risk or in an ideal situation, already have a buyer and seller lined up and capture the spread.
I'm sure there are many roads to Rome, but this is the most common one I've seen: A) Client says; Buy 10k AA @ 14.95 high. After the order is executed, lets say 14.93, add som points (vary if you're trading through ie. Goldman Sachs' platform Reddi or Fidessa) and the client gets their order. Also a fee (lets say 0.5% for some clients) is added.
Sint deleniti inventore eum. Voluptas non totam et blanditiis ad reprehenderit est. Unde enim id fuga consequatur modi sit. Ea modi eaque perferendis nihil dolorem nobis. Corporis dolores magni fugiat cupiditate dolorem aperiam quisquam. Numquam sunt possimus impedit. Dicta corporis qui officia non dolorem facilis.
Est reiciendis corrupti ullam aspernatur voluptas maxime consectetur. Sit ab praesentium reiciendis. Vitae et laboriosam quam. Enim velit et consequuntur laboriosam quas fugiat in.
Repellat error aliquid minus laborum beatae alias. Iure cumque voluptatem aliquam voluptatum necessitatibus similique facilis vel. Id est fuga exercitationem maiores repellat nulla harum. Sed numquam dolor rem sunt est. Architecto tempore inventore eligendi.
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...