Proprietary trading: Difference between revisions
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imported>Doug Williamson (Add risk mitigation measures.) |
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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. | ||
Revision as of 16:10, 26 May 2020
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.
