What is Proprietary Trading?

What is Proprietary Trading?

Ed Turner

15 years: Trading & commodities

Proprietary trading specifically refers to trading that relies solely on deriving a profit from price action using a firm's own money. In this video, Ed expands on this definition to explain proprietary trading, as well as commodity trading and derivatives and how to interpret the forward curve.

Proprietary trading specifically refers to trading that relies solely on deriving a profit from price action using a firm's own money. In this video, Ed expands on this definition to explain proprietary trading, as well as commodity trading and derivatives and how to interpret the forward curve.

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What is Proprietary Trading?

12 mins 48 secs

Overview

Trading is the process of buying or selling securities, products, services or goods in search of profit. Proprietary trading looks to do this using a firm's own money; by contrast with customer trading, where traders profit by charging margins, costs or commissions to clients for execution.

Key learning objectives:

  • What is proprietary trading?

  • What is a forward curve?

  • What are contango and backwardation?

  • What is a cash-and-carry trade?

  • Dodd-Frank and its effect on proprietary trading

  • Which parties are involved in commodity trading?

  • Why do people use commodity derivatives?

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Summary
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Expert
Ed Turner

Ed Turner

Ed is the Head of Trading for a London based Commodity Trading Fund. He has been trading commodity derivatives including base metals, crude and oil products. Ed is an entrepreneur and driven by developing businesses.

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