Podcast
Questions and Answers
What is the primary goal of a buy-side trader when executing trades?
What is the primary goal of a buy-side trader when executing trades?
Which factor is typically a lower priority in stable and liquid markets compared to volatile markets?
Which factor is typically a lower priority in stable and liquid markets compared to volatile markets?
Which of the following activities is NOT typically associated with increasing revenue for a sell-side equity trading desk during a bull market?
Which of the following activities is NOT typically associated with increasing revenue for a sell-side equity trading desk during a bull market?
Liquidity of an equity primarily depends on which of the following factors?
Liquidity of an equity primarily depends on which of the following factors?
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What does transaction cost analysis (TCA) evaluate when assessing a sell-side firm?
What does transaction cost analysis (TCA) evaluate when assessing a sell-side firm?
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Which of the following is NOT mentioned as a criterion for selecting a sell-side broker?
Which of the following is NOT mentioned as a criterion for selecting a sell-side broker?
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What is the primary motivation for investment dealers to engage in principal trading?
What is the primary motivation for investment dealers to engage in principal trading?
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Which of the following does NOT constitute a revenue stream for sell-side equity firms?
Which of the following does NOT constitute a revenue stream for sell-side equity firms?
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How do buy-side professionals typically choose their sell-side traders and representatives?
How do buy-side professionals typically choose their sell-side traders and representatives?
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What typically happens to institutional client activity as fresh investor capital flows into equity portfolios?
What typically happens to institutional client activity as fresh investor capital flows into equity portfolios?
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What is a primary responsibility of investment dealers before granting DEA access to clients?
What is a primary responsibility of investment dealers before granting DEA access to clients?
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What major event in 2010 highlighted risks associated with high-speed trading and DEA?
What major event in 2010 highlighted risks associated with high-speed trading and DEA?
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Which of the following is NOT a requirement for clients seeking DEA access?
Which of the following is NOT a requirement for clients seeking DEA access?
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What potential impact does a weak link in a DEA trading system have on the overall market?
What potential impact does a weak link in a DEA trading system have on the overall market?
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Why are investment dealers required to have clients sign a written agreement regarding DEA trading?
Why are investment dealers required to have clients sign a written agreement regarding DEA trading?
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What is one of the primary responsibilities of a buy-side portfolio manager?
What is one of the primary responsibilities of a buy-side portfolio manager?
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Which task is NOT associated with the responsibilities of the buy-side manager?
Which task is NOT associated with the responsibilities of the buy-side manager?
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How does a buy-side trader support a portfolio manager?
How does a buy-side trader support a portfolio manager?
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Which of the following is a duty of the buy-side portfolio manager in relation to client servicing?
Which of the following is a duty of the buy-side portfolio manager in relation to client servicing?
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What aspect of performance is a portfolio manager NOT responsible for?
What aspect of performance is a portfolio manager NOT responsible for?
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Study Notes
Institutional Client Overview
- This chapter details working with institutional clients, beginning with an overview of the institutional market and an examination of the buy-side and sell-side.
- Institutional clients are discussed, including their structure, functions, operations and various aspects of trading, including revenue sources, clearing and settlement, and suitability requirements.
- Roles and responsibilities of market participants, investment styles, guidelines and restrictions are explored including algorithmic trading, high-frequency trading (HFT), and dark pools.
Learning Objectives
- Distinguish between the sell-side and buy-side within the institutional marketplace context.
- Identify the responsibilities of buy-side portfolio managers and traders.
- Describe the functions of different offices (back, middle, front) at a sell-side firm that relate to equity sales and trading.
- Describe the revenue sources on the equity and fixed-income desks of a sell-side trading firm.
- Explain the institutional settlement process.
- Summarize the roles and responsibilities of investment dealers.
- Distinguish between buy-side investment management styles.
- Define algorithmic trading, high-frequency trading, and dark pools.
Content Areas
- Examination of sell-side and buy-side of the market.
- Responsibilities of buy-side portfolio managers and traders.
- Organizational structure of a sell-side trading firm.
- Revenue sources for sell-side trading firms.
- Institutional clearing and settlement processes.
- Roles and responsibilities in the institutional market.
- Investment styles, guidelines, restrictions and regulations.
- Description of algorithmic trading, high-frequency trading, and dark pools.
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Description
This quiz covers the intricacies of working with institutional clients within the financial markets. It explores the dynamics between buy-side and sell-side operations, as well as various aspects of trading, including revenue sources and roles of market participants. Test your understanding of key concepts such as algorithmic trading and portfolio management responsibilities.
