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elearning > How dealers make (and lose) money

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Learn about the following:

The three ways dealers make money. Bid-offer spreads. Arbitrage. Risk taking.

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Course Summary

Dealers menuDealers bid offerDealers arbitrage

Dealers arbitrage 2Dealers riskDealers risk 2

  • 30 minute
  • 8 question multiple choice
  • The three ways dealers make money
  • Bid-offer spreads
  • Arbitrage
  • Risk taking

How Dealers Make (And Lose) Money - the details

1. Bid-Offer spreads

  • Buy low, sell high
  • What affects dealing profit
  • Widening and narrowing dealing spreads
  • What influences the spread
  • How a dealer can lose

2. Arbitrage

  • Defined
  • Cash and carry trades
  • Futures swap arbitrage
  • Is making money this easy?

3. Risk Taking

  • Proprietary trading
  • Going long and going short
  • Limits, do they prevent losses?
  • The source of profits
  • Internal transfer pricing

4. Summary

5. Test

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