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An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges. Through this process, colloquially known as floating, or going public, a privately held company is transformed into a public company. Initial public offerings can be used to raise new equity capital for companies, to monetize the investments of private shareholders such as company founders or private equity investors, and to enable easy trading of existing holdings or future capital raising by becoming publicly traded.
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, FICC services or research. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.
The London Gold Fixing is the setting of the price of gold that takes place via a dedicated conference line. It was formerly held on the London premises of Nathan Mayer Rothschild & Sons by the members of The London Gold Market Fixing Ltd.
A financial analyst is a professional, undertaking financial analysis for external or internal clients as a core feature of the job. The role may specifically be titled securities analyst, research analyst, equity analyst, investment analyst, or ratings analyst. The job title is a broad one: in banking, and industry more generally, various other analyst-roles cover financial management and (credit) risk management, as opposed to focusing on investments and valuation; these are also discussed in this article.
Proprietary trading occurs when a trader trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money, aka the nostro account, contrary to depositors' money, in order to make a profit for itself. Proprietary trading can create potential conflicts of interest such as insider trading and front running.
Financial risk management is the practice of protecting economic value in a firm by using financial instruments to manage exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. As for risk management more generally, financial risk management requires identifying its sources, measuring it, and the plans to address them. See Finance § Risk management for an overview.
Citibank Limited is a Citigroup subsidiary, which is a licensed bank incorporated in Hong Kong.
Front running, also known as tailgating, is the prohibited practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. In essence, it means the practice of engaging in a Personal Securities Transaction in advance of a transaction in the same security for a client's account. Front running is considered a form of market manipulation in many markets. Cases typically involve individual brokers or brokerage firms trading stock in and out of undisclosed, unmonitored accounts of relatives or confederates. Institutional and individual investors may also commit a front running violation when they are privy to inside information. A front running firm either buys for its own account before filling customer buy orders that drive up the price, or sells for its own account before filling customer sell orders that drive down the price. Front running is prohibited since the front-runner profits from nonpublic information, at the expense of its own customers, the block trade, or the public market.
A covered option is a financial transaction in which the holder of securities sells a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of selling a covered option also limits their profit potential to the upside. One covered option is sold for every hundred shares the seller wishes to cover.
A trading room gathers traders operating on financial markets. The trading room is also often called the front office. The terms "dealing room" and "trading floor" are also used, the latter being inspired from that of an open outcry stock exchange. As open outcry is gradually replaced by electronic trading, the trading room becomes the only remaining place that is emblematic of the financial market. It is also the likeliest place within the financial institution where the most recent technologies are implemented before being disseminated in its other businesses.
Sell side is a term used in the financial services industry. The three main markets for this selling are the stock, bond, and foreign exchange market. It is a general term that indicates a firm that sells investment services to asset management firms, typically referred to as the buy side, or corporate entities. The sell side and the buy side work hand in hand and each side could not exist without the other. These services encompass a broad range of activities, including broking/dealing, investment banking, advisory functions, and investment research.
Scalping, when used in reference to trading in securities, commodities and foreign exchange, may refer to either
- a legitimate method of arbitrage of small price gaps created by the bid–ask spread, or
- a fraudulent form of market manipulation.
Delta one products are financial derivatives that have no optionality and as such have a delta of one – meaning that for a given instantaneous move in the price of the underlying asset there is expected to be an identical move in the price of the derivative. Delta one products can sometimes be synthetically assembled by combining options. For instance, you can be long a forward on WTI crude oil at price X by buying an X strike call and selling an X strike put. This is known as put call parity. Delta one products often incorporate a number of underlying securities and thus give the holder an easy way to gain exposure to a basket of securities in a single product.
Strategy indices are indices that track the performance of an algorithmic trading strategy. The algorithm clearly and transparently specifies all the actions that must be taken. The following are examples of algorithms that strategies can be based on.
- Pairs trading strategy. This strategy examines pairs of instruments that are known to be statistically correlated. For example, consider Shell and Exxon. Both are oil stocks and are likely to move together. Knowledge of this trend creates an opportunity for profit, as on the occasions when these stocks break correlation for an instant, the trader may buy one and short sell the other at a premium.
- Fed funds curve strategy This strategy takes a view on the shape of the curve based on the actions of the Fed. In this strategy, one puts on a steepener or flattener, based on whether the Federal Reserve has cut the benchmark rate or raised it. This is based on the conventional wisdom that the curve steepens when the rate is expected to be cut, and vice versa.
- Implied volatility against realized volatility . In a number of markets such as commodities and rates, the implied volatility, as implied by straddle prices is higher than the realized volatility of the underlying forward. One way to 'exploit' this is to sell a short expiry straddle and delta-hedging it until it is alive. The strategy makes money if at expiry, the sum of the premium received, the (negative) final value of the straddle and the (positive/negative) value of the forwards is greater than zero. A variation of this, and more common solution in equity, is to sell either a one-month or three-month variance swap – usually on the Eurostoxx 50E or S&P500 index – that pays a positive performance if the implied volatility is above the realised volatility at expiry; in this case there is no need to delta-hedging the underlying movements.
UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS client services are known for their strict bank–client confidentiality and culture of banking secrecy. Because of the bank's large positions in the Americas, EMEA, and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank.
CI Direct Trading, a division of CI Investment Services Inc., is an online brokerage firm that provides an electronic trading platform to trade financial assets. The company is headquartered in Toronto, Canada and provides trade execution services for various financial instruments such as stocks, bonds, options, exchange-traded fund (ETF) and mutual funds.
Markets.com, is a global trading and investing brand owned by Finalto Group, the financials division of FTSE 250 listed Playtech. Market.com is an electronic trading platform for trading on the foreign exchange market, commodity market, cryptocurrency market, stock market, ETFs and bonds through Contracts for Difference (CFDs) and in the UK & Ireland, Spread Bets. It is also an investment services provider offering physical share dealing and a quantitative investment strategy builder. Playtech is listed on the London Stock Exchange under ticker PTEC.
Finvasia is an Indian fintech company headquartered in Mohali, Punjab. The organization has expanded its hands into healthcare services by acquiring Ginihealth and into retail FX space by acquiring major investment platform Zulu Trade where the existing CEO of Finvasia Tajinder Virk became Zulu's interim chief.
Flow Traders is a leading global market maker and proprietary trading firm. It provides liquidity in the securities market by using high frequency and quantitative trading strategies. Originally founded in Amsterdam, Flow has offices in New York, London, Milan, Paris, Cluj, Singapore, and Hong Kong.
Citadel Securities is an American market making firm headquartered in Miami. It is one of the largest market makers in the world, and is active in more than 50 countries. It is the largest designated market maker on the New York Stock Exchange. Citadel Securities is a separate entity from the hedge fund Citadel LLC, although both were founded and are majority owned by American financier Kenneth C. Griffin. Citadel Securities is expected to eventually move its headquarters from Chicago to Miami, having bought land there to build its new headquarters.
References
- ↑ "What is Sales and Trading?". Sales and Trading.
{{cite web}}: CS1 maint: url-status (link) - ↑ "What are The Sales and Trading Desks?". Sales and Trading.
{{cite web}}: CS1 maint: url-status (link) - ↑ "The Sales Side of S&T". SalesAndTrading.org.
{{cite web}}: CS1 maint: url-status (link)
- The Investment banking handbook: Chapter 11 - Sales & Trading. John Wiley and Sons, 1988
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