Proprietary trading: Difference between revisions
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imported>Doug Williamson (Add abbreviation. Source; CFI institute webpage https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/proprietary-trading/) |
imported>Doug Williamson (Add link.) |
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Trading by a financial institution on its own behalf, rather than acting primarily as an intermediary. | Trading by a financial institution on its own behalf, rather than acting primarily as an intermediary. | ||
It is potentially highly profitable, but also risky. | |||
Prudential regulations restrict the amount of proprietary trading that banks are allowed to do, in order to reduce the risk. | |||
Sometimes abbreviated to 'prop' trading. | Sometimes abbreviated to 'prop' trading. | ||
| Line 6: | Line 12: | ||
== See also == | == See also == | ||
* [[Bank]] | * [[Bank]] | ||
* [[Broker-dealer]] | |||
* [[Capital]] | * [[Capital]] | ||
* [[Commercial bank]] | * [[Commercial bank]] | ||
* [[Designated investment firm]] | |||
* [[Investment bank]] | * [[Investment bank]] | ||
* [[Investment firm]] | |||
* [[Liikanen rule]] | |||
* [[Merchant bank]] | * [[Merchant bank]] | ||
* [[Primary market]] | * [[Primary market]] | ||
* [[Proprietary]] | * [[Proprietary]] | ||
* [[Prudential]] | |||
* [[Prudential regulation]] | |||
* [[Secondary market]] | * [[Secondary market]] | ||
* [[Security]] | * [[Security]] | ||
Latest revision as of 13:17, 17 July 2022
Trading by a financial institution on its own behalf, rather than acting primarily as an intermediary.
It is potentially highly profitable, but also risky.
Prudential regulations restrict the amount of proprietary trading that banks are allowed to do, in order to reduce the risk.
Sometimes abbreviated to 'prop' trading.
