Sell-Side
Candlefocus EditorToday, the modern sell-side has evolved and encompasses a variety of activities including analysis, research, sales, and trading. This side of Wall Street is composed mostly of large institutional firms such as investment banks, financial services firms, and commercial banks, who offer their products and services to both institutional and retail investors.
At the very center of the sell-side of Wall Street are the market makers. These are large firms that effectively work both sides of the market, constantly buying and selling securities in the course of trading. Market makers build a strong market by providing liquidity, making it easier for stocks, bonds, and other securities to be bought and sold. Market makers also take on financial risk, as they are willing to take ownership of a security in case the price of the security drops.
The sell-side also includes traders, who are involved in buying and selling securities to try and create a profit from price movements in the market. Their goal is to buy and sell quickly in order to capture profits from small price movements. Traders can work for either retail or institutional investors, and may specialize in specific markets such as equities, options, futures, Forex, or commodities.
Finally, the sell-side entails a variety of analysts and researchers whose task it is to provide advice to both retail and institutional clients. These analysts and researchers can specialize in research and/or analysis in specific sectors or industries. They may also be involved in making recommendations on which securities to buy and sell.
The sell-side of Wall Street is a complex and multifaceted industry responsible for the creation, promotion, and sale of various financial products. The varied roles on the sell side work together, to provide liquidity and market-making operations, to enable trading and investing, and to offer research, advice and analysis for an ever-changing financial landscape.