how trading desks work
trading desks generate an income by charging a commission on trades they transact for example a hedge fund may deal through an equity trading desk at an investment bank and pay a modest fee for each trade in some cases brokers may operate their own trading desk by being the counterparty for their client s trades these trades may never reach the interbank market and may stay within the confines of the broker s own liquidity pool there are many different types of trading desks depending on the security being traded oftentimes these desks are separated and may be located at certain central exchanges types of trading deskssome common trading desks include each of these sectors can be further subdivided for instance fixed income is a very broad category and can deal with anything from ultra safe u s treasuries to ultra risky low grade company bonds also known as junk bonds larger investment banks may subdivide their trading desks to specialize in narrower categories within these main sectors many brokers also offer trading desks for their clients especially in the foreign exchange market and equity day trading market with the ability to instantly execute trades these brokers set themselves apart from other brokers acting as intermediaries most large financial institutions have their own trading desks in place to assist their internal teams and external clients in placing orders 