Investment banking: market trading activities

Alongside great skill in assisting companies with primary market issuance of bonds and shares, investment banks have developed experience and superior capability in secondary market dealing for equities, bonds, derivatives, commodities, currencies, etc. They perform one, two or all three of the following roles in market trading:

  • Broker. Act on behalf of clients to try and secure the best buy or sell deal in the market place.
  • Market maker. Quote two prices for a security, the price at which they are willing to buy and a (slightly higher) price at which they are willing to sell the same security. They ‘make a market’ in an instrument and expect to make numerous purchases and sells during a ...

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