Doing the Reverse Desk

Dictionary Says

Definition of 'Doing the Reverse Desk'


A slang phrase referring to a tactic a hedge fund would use to try to mislead other funds that attempt to mimic its trades.

Investopedia Says

Investopedia explains 'Doing the Reverse Desk'


By making small trades but enthusiastically purporting these trades, a hedge fund will attempt to mislead other funds into thinking that these are its big trades and investments. The hedge fund doing the reverse desk is trying to minimize the amount that it is being copied by its competitors. If other hedge funds attempt to mimic a portfolio this increase in buying will result in increased prices, so by "doing the reverse desk" hedge funds are attempting also to get the most favorable prices for their trades. The results of this tactic stem from the fact that news about trading spreads very quickly, so by adding some noise into the communication process hedge funds can attempt to mislead other funds.

comments powered by Disqus
Hot Definitions
  1. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center