Q&A: What does it mean to "have buy-side experience"?

Just like any street, Wall Street has two sides: the buy-side, and the sell-side. Firms typically are oriented to one side...

  • Sell-side firms underwrite securities and make secondary markets in stocks, bonds, derivatives, and a variety of other securities. They tend to be household names like Goldman Sachs, Bear Stearns, and Merrill Lynch, and have higher salaries (not without higher turnover as well). They also have proprietary traders to invest the firm's own capital. Faster cash turnover (partly due to taking on bigger risks) and tend to be more stressful.
  • Buy-side firms manage portfolios on behalf of clients for a fee. They include mutual funds, pension funds, hedge funds, and lots of different types of institutions.

The buy-side needs the sell-side for execute trades. The sell-side needs the buy-side to trade securities (ie. participate in the secondary markets.) Both sides together make Wall Street.

Category: C++ Quant

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