Читать книгу Investment Banking For Dummies - Matthew Krantz - Страница 63

Investment banks’ trading operations are designed to serve several purposes. At the source, the trading operations are made to handle the demands of customers of the firm who need to purchase or unload large amounts of stock or other investments.

The trading desks of investment banks can assist customers, including pension plans and mutual funds, to build large positions in a financial asset or unload it.

Many investment banks get involved in trading to generate money from a variety of sources, including the following:

 Trading financing: Many investment banking operations lend lines of credit to other financial institutions, usually on a short-term basis. These loans can be used by the investment bank’s clients who want to place trades.

 Trade facilitation: Companies that use big investment banks usually aren’t buying or selling 100 shares of a stock. Hundreds of thousands of shares may be bought or sold by these mega players. There are so many moving parts that having an investment bank can help in the transactions, including offering insurance services where a client can be protected if there’s an unforeseen drop in portfolio values. Investment banking operations often serve the role of market maker (a position where they buy and sell securities). As a market maker, investment banks stand ready to buy or sell lots of stock just to make sure there’s adequate trading in a security.

 Creating securities to be traded: Investment banks are routinely cooking up new securities, typically those that have value based on other investment like stocks, for investors to trade. These invented securities are called derivatives, because they derive their value based on another asset.