Chapter 27: Working with the Institutional Client

In this section

• 27.1 The Sell Side and the Buy Side of the Market
  • 27.1.1 Overview of Market Participants
    This section provides a comprehensive analysis of the roles and functions of sell-side and buy-side entities in the financial markets, focusing on their contributions to market structure and client service.
  • 27.1.2 Interactions Between Sell Side and Buy Side
    An exploration of the dynamic and collaborative relationships between sell-side and buy-side participants in the financial markets, focusing on the flow of information and services they exchange.
• 27.2 The Responsibilities of a Buy-Side Portfolio Manager and Trader
  • 27.2.1 Portfolio Management Duties
    Learn the vital roles and responsibilities of buy-side portfolio managers, including investment strategy development and performance monitoring and adjustment, crucial for aligning portfolios with client objectives and market conditions.
  • 27.2.2 Trading Responsibilities
    This section explores the key responsibilities of a buy-side portfolio manager and trader, focusing on trade execution, timing, and risk management strategies.
• 27.3 The Organizational Structure of a Sell-Side Trading Firm
  • 27.3.1 Key Departments and Functions
    An in-depth exploration of the essential departments within a sell-side trading firm, including their roles and interactions.
  • 27.3.2 Supporting Functions
    An overview of the pivotal supporting functions within a sell-side trading firm, emphasizing compliance, risk management, technology, and operations.
• 27.4 The Revenue Sources for Sell-Side Trading Firms
  • 27.4.1 Commission-Based Revenue
    An exploration of the commission-based revenue models utilized by sell-side trading firms, focusing on trade execution fees and research services.
  • 27.4.2 Proprietary Trading
    Understanding the role of proprietary trading as a revenue source for sell-side trading firms, focusing on trading desk profits and market-making activities.
• 27.5 Institutional Clearing and Settlement
  • 27.5.1 Clearing Procedures
    This section delves into the critical processes of institutional clearing and settlement, focusing on the role of clearinghouses and the mechanisms involved in netting transactions.
  • 27.5.2 Settlement Processes
    An in-depth exploration of the settlement processes within institutional trading, focusing on trade completion and operational risk management.
• 27.6 Roles and Responsibilities in the Institutional Market
  • 27.6.1 Portfolio Managers
    Understanding the key roles and responsibilities of portfolio managers in the institutional market, including investment oversight, client reporting, and communication.
  • 27.6.2 Traders and Sales Professionals
    An in-depth exploration of the roles and responsibilities of traders and sales professionals within the institutional market, focusing on trade facilitation and client relationship management.
• 27.7 Investment Styles, Guidelines, and Restrictions
  • 27.7.1 Investment Styles
    An in-depth exploration of investment styles such as growth, value, and income strategies, including diversification and alignment with institutional clients' risk appetites.
  • 27.7.2 Guidelines and Restrictions
    A comprehensive overview of guidelines and restrictions essential for institutional investment portfolios, focusing on Investment Policy Statements and compliance with mandates.
• 27.8 Algorithmic Trading
  • 27.8.1 Definition and Applications
    An in-depth exploration of algorithmic trading, its definition, applications, including automated trading systems, and the benefits of speed and efficiency.
  • 27.8.2 Challenges and Risks
    An in-depth exploration of the challenges and risks associated with algorithmic trading, focusing on market impact and the necessity for enhanced security and oversight.