The material in this chapter should be cross-referenced with Case Study 5, “A Tale of Two Hedge Funds: Magnetar and Peloton,” and Case Study 6, “Kmart, Sears, and ESL: How a Hedge Fund Became One of the World’s Largest Retailers.”
This chapter focuses on the two types of trading conducted by investment banks: Client-Related Trading and Proprietary Trading. The chapter also describes the activities of the two key trading businesses: Equities Trading and Fixed Income, Currencies, and Commodities (FICC) Trading.
An investment bank’s client-related trading business is comprised of traders, sales professionals, and research analysts. Traders are responsible for buying securities from institutional and individual investors ...