The following excerpt if from the notes to the financial statements in the 2009 Annual Report of Bank of America (p.147):
The Corporation enters into trading derivatives to facilitate client transactions for proprietary trading purposes, and to manage risk exposures arising from trading assets and liabilities.
a. What is meant by “proprietary trading”?
Question 3.15: The following excerpt if from the notes to the financial sta...
Proprietary trading is trading for a company’s own account. Financial intermediaries may generate income from commissions when they facilitate trades, but in proprietary trading these institutions do not generate commission income, but rather are investing on their own account in the expectation of generating gain (though losses are also possible).
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