Proprietary Trading

What Does Proprietary Trading Mean?
When a firm trades for direct gain instead of commission dollars. Essentially, the firm has decided to profit from the market rather than from commissions from processing trades.

Investopedia explains Proprietary Trading
Firms that engage in proprietary trading believe that they have a competitive advantage that will enable them to earn excess returns.

Related Terms

Broker
Commission
Hard Dollars
Prop Shop
Soft Dollars
Trade
More Related Terms

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Paying Your Investment Advisor - Fees Or Commissions? - The way a professional is compensated can affect quality of service. Learn more here.
Don't Let Brokerage Fees Undermine Your Returns - Smart investors don't give away more money than necessary in commissions and fees. Find out how to save.
Traders And Investors' Roles In The Marketplace - Discover how these two groups work together to keep the market functioning properly.

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