What Does It Mean to Trade?

This chapter will focus on the details of what a trading floor does day to day by looking at three different trades. The first is a US government bond trade for a large US asset manager. The second is a large debt issuance driven by an acquisition where the client issues in US dollars but needs UK pounds. The third is a structured equity product which is created by the trading floor to sell to the bank’s retail clients as an investment product. These different trades will introduce different trading floor dynamics, different financial market drivers and different risk taking issues on the trading floor. This chapter will also answer questions such as: What does it mean to “make a market”? Why do clients ...

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