Principal trade
From Wikipedia, the free encyclopedia
 |
This article does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (December 2009) |
 |
This article is an orphan, as few or no other articles link to it. Please introduce links to this page from related articles; suggestions may be available. (February 2009) |
A principal trade occurs when a brokerage house buys securities on the secondary market with the express strategy to hold long enough for a price appreciation. At that point the broker sells retails to the end use and gains appreciation plus commission. Brokers are required to notify when they provide a principal trade, though will typically obfuscate the fact through the fine print. The broker always seeks to sell their inventory to prospective buyers rather than buying new into the market. Common in bond sales.
 |
This economics or finance-related article is a stub. You can help Wikipedia by expanding it. |
