Proprietary Trading

Proprietary trading, or "prop trading," refers to financial firms, such as investment banks or trading firms, using their own money to buy and sell securities, derivatives, or other financial instruments. The goal is to make profits from their trading activities rather than earning commissions or fees from clients. These firms often employ advanced strategies and technologies to capitalize on market opportunities, assuming the risk themselves. While potentially profitable, proprietary trading can also expose firms to significant losses if their trades don't perform as expected.