Equity Trading

Topic:

Who initiates trades?

investment & speculation

managed investment & speculation

arbitrage & liquidity provision

via broker

via broker or direct market access

direct market access

regular people

on behalf of regular people

own account (prop)

Who?

Why?

How?

Retail

Institutional

Pro-Traders

How does this look like at the broker?

Retail

Institutional

Pro-Traders

broker decides: usually a simple rule & automated

investment advisors

requests to take position

liability desk;
needs to trade out of position

agency trading;
choice of algo based on performance metrics

set of instructions

market making

sophisticated, quasi-autonomous system

Exchanges

Wholesellers

Dark pools

Broker systems

Where does trading occur?

Exchange

Internalizer

Wholeseller

Darkpool

Investor

Trading Venue

Brokerage

Settlement

Summary of a trade's life cyle

MGT435: The Equity Trading Business

By Andreas Park

MGT435: The Equity Trading Business

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