| Jennifer Berg | ||||||
Programme trading takes two basic forms. The first approach is for banks and brokers simply to execute trades on behalf of their clients, acting as their agents in the marketplace and turning over most or all of the price benefits to the clients in return for a commission for doing the deal.
Alternatively, they can leverage their balance sheets, taking bulk trades onto their own books – assuming the attendant market risk – in an attempt to extract more benefit from their dealing expertise.
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