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Proprietary Trading |
Also found in: Wikipedia | 0.01 sec. |
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Proprietary trading Proprietary Trading The act or practice of an investment bank conducting trades on its own account, rather than on behalf of a client. Proprietary trading has three primary benefits. First, it allows the investment bank to profit on its own instead of simply collecting commissions and fees from clients. Secondly, it lets the bank build an inventory of securities. This can be useful if a client places an order for the securities in an illiquid market. In such a situation, the investment bank can fill the order from its own inventory. Finally, proprietary trading allows the bank to make a market when it is assigned to ensure the liquidity for a given security. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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