The Handbook of Municipal Bonds

CHAPTER 15

The Roles of Traders and Brokers

JonPaul Zaptin Vice President JPMorgan Securities

 

 

 

In the middle of a municipal bond department on a bustling trading floor, the roles and responsibilities of a trader are very clear and well understood by those around him—or her—usually. Place that trader at a dinner table or at a party with friends and family and listen to a conversation about what he does for a living and the confusion can often be comical. One trader here at JPMorgan has a mother who tells her friends that he’s a stockbroker for Morgan Stanley. What is a trader? A dealer? A salesperson? A market maker? This chapter will define many of the characteristics and responsibilities of municipal traders and brokers and how their jobs intertwine.

TRADERS

Under normal circumstances, a fair amount of work goes into getting a trade done. Often to get the wheels in motion, a trader will quote a two-sided market or a salesperson will ask the trader for a bid on a customer’s behalf. These steps are usually just the beginning of a series of phone calls or Bloomberg messages that comprise a negotiation process that may or may not result in a trade. After all the marketing efforts cease and price negotiations are finalized, it is a trader who sits at the center of a transaction and ultimately decides to write the trade ticket or not. Weighing many factors, and acting on behalf of his firm and with his own risk position and profitability in mind and at stake, it is the trader ...