Podcast
Questions and Answers
What is primarily focused on by institutional investment management firms?
What is primarily focused on by institutional investment management firms?
Which of the following is NOT a channel through which institutional investment managers offer their services?
Which of the following is NOT a channel through which institutional investment managers offer their services?
What is one role of investment dealers in the context of institutional investment management?
What is one role of investment dealers in the context of institutional investment management?
What significant change has influenced the relationship between institutional investment managers and investment dealers in recent years?
What significant change has influenced the relationship between institutional investment managers and investment dealers in recent years?
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How did portfolio managers traditionally communicate security transaction orders before electronic trading became widespread?
How did portfolio managers traditionally communicate security transaction orders before electronic trading became widespread?
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What is the primary goal of a buy-side trader?
What is the primary goal of a buy-side trader?
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In which market conditions might traders feel the need to shop around for the best price?
In which market conditions might traders feel the need to shop around for the best price?
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Which of the following is NOT a criterion for selecting a sell-side broker?
Which of the following is NOT a criterion for selecting a sell-side broker?
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What does transaction cost analysis (TCA) primarily evaluate?
What does transaction cost analysis (TCA) primarily evaluate?
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Which factor is emphasized when evaluating relationships between trading professionals?
Which factor is emphasized when evaluating relationships between trading professionals?
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Which staff member acts as the relationship manager between the institutional client and the dealer?
Which staff member acts as the relationship manager between the institutional client and the dealer?
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What is the primary goal of program trading?
What is the primary goal of program trading?
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Which of the following accurately describes equity structured finance?
Which of the following accurately describes equity structured finance?
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What type of traders specialize in offering a constant two-sided market for securities?
What type of traders specialize in offering a constant two-sided market for securities?
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Why do many institutional equity investors prefer derivatives over cash equities?
Why do many institutional equity investors prefer derivatives over cash equities?
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Which of the following best describes the primary difference between buy side and sell side firms?
Which of the following best describes the primary difference between buy side and sell side firms?
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Which role primarily involves providing analysis and research services to institutional clients?
Which role primarily involves providing analysis and research services to institutional clients?
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What is the main function of a prime brokerage?
What is the main function of a prime brokerage?
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Which type of trading environment is specifically characterized by the use of advanced algorithms and frequent order execution?
Which type of trading environment is specifically characterized by the use of advanced algorithms and frequent order execution?
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Which of the following terms is associated with investment dealers who specifically deal with large institutional clients?
Which of the following terms is associated with investment dealers who specifically deal with large institutional clients?
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Study Notes
Institutional Client Overview
- Institutional clients are sophisticated investors like mutual funds, pension funds, and corporate treasuries
- Sell-side firms facilitate trading for institutional clients
- Buy-side firms manage investments (funds, etc.) for institutional clients
- Institutions often have large accounts, requiring specialized services and potentially lower fees
Learning Objectives
- Distinguish between sell-side and buy-side roles in the institutional market
- Identify buy-side portfolio manager and buy-side trader responsibilities
- Understand sell-side roles (back, middle, front office) relevant to equity sales and trading
- Describe the revenue sources of equity and fixed-income trading desks on the sell-side
- Explain institutional settlement processes
- Define the roles and responsibilities within an institutional investment dealer
- Distinguish between buy-side investment management styles
- Define algorithmic trading, high-frequency trading, and dark pools
Content Areas
- Sell-Side and Buy-Side of the Market
- Responsibilities of Buy-Side Portfolio Manager and Trader
- Organizational Structure of a Sell-Side Trading Firm
- Institutional Clearing and Settlement
- Roles and Responsibilities in the Institutional Market
- Investment Styles, Guidelines, and Restrictions
- Algorithmic Trading
Key Terms
- Agency traders
- Algorithmic trading
- Analyst
- Axe sheets
- Buy-side
- Clearing
- Coverage traders
- Dark pools
- Direct electronic access (DEA)
- High-frequency trading (HFT)
- Institutional clients
- Institutional salesperson
- Institutional trader
- Investment bankers
- Liability traders
- Market makers
- Order flow
- Origination
- Price spread
- Prime brokerage
- Proprietary traders
- Research associate
- Responsible designated trader
- Sell-side
- Settlement
- Soft-dollar arrangement
- Straight-through processing (STP)
- Trade-matching elements
- Universal Market Integrity Rules
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Description
Test your knowledge on the roles and responsibilities of sell-side and buy-side firms in the institutional market. This quiz will help you understand key concepts such as institutional settlement processes, revenue sources in trading desks, and various investment management styles. Perfect for anyone looking to deepen their understanding of institutional clients.