Trading desk | How it works

You may have heard the term "trading desk" on the news when investor activity is reported. Today we will examine what it means when a company refers to its trading desk. We'll give you some pointers on how to get one set up for your own personal trading adventure.

Trading desk setup

A trading desk, sometimes referred to as a dealing desk, is a physical location, like an office,  where a company’s traders spend their working day trading a whole host of different assets relevant to the company’s business. Some traders will specialize in stocks, some in forex and others in commodities. Depending on the size of the company, all traders will occupy the same space in the office building or have separate units specialising in certain types of assets. A trading desk will be equipped with technological tools to monitor markets, obtain market-moving information as well as execute trades. Computers, often called terminals, and huge screens displaying asset prices and news in real time are essential as are phones and messaging applications. 

Home trading desk set up

Since the pandemic, some traders have worked remotely. They have taken their trading desks and set themselves up at home. There has been a split opinion in the industry on whether it is as efficient as a centralised trading desk in the office. Many old-school and experienced traders believe the job has to be done in person, on the floor, often over the phone. This is because there is still a large amount of interconnectivity between departments, phone numbers, internet and intranet systems. Not to mention top-of-the-range trading software that can be used to execute trades remotely. A trader’s desk may have six screens and a load of charts, which may be difficult to set up at home. For retail investors though a home set-up is less complicated thanks to technology and digital innovation. Both professional and retail traders often trade on the move. This is possible thanks to high-quality mobile trading apps such as amana. There are a lot of competitors in this field, and you must do your trading with a broker with a proven track record and a highly-rated app. Watch for the commission and hidden costs of executing your trades. 

amana is ahead of many other trading apps that want you to sign up and use their service. Other companies will usually take a cut of your trading profit. amana only charges fees incurred for accessing a market on our end, and we are transparent upfront about this. 

Trading desk share price

If you're trading remotely, you may think you do not have access to the same markets or prices as larger institutional investors. This is not the case. You can see live prices on apps such as the amana and execute your trades as you see fit. 

Some traders think the are at a disadvantage because they are not sitting behind a computer screen in London or the Wall Street. Again, this is a misconception. You have access to all the best online information and walkthrough guides. These tools will give you a solid indication of how to position yourself in the market.

How do I start a trading desk?

Well, you need to buy six top-of-the-range computers, right? No. In reality, if you own a mobile phone, you are 90% of the way there. The remaining 10% involves downloading a mobile trading app like amana and registering your information. 

You will receive a $100 worth of Tesla or Anthami stock (or Bitcoin or Ethereum) when you sign up for the amana's app to get you going. That said, you must ensure you conduct the proper market research before entering any trade. This applies to forex, cryptocurrency and stocks. If you are not thoroughly looking into the field you are investing in, you are in trouble. 

What does a trading desk do?

In the traditional sense of the term, a trading desk manoeuvres clients' or the company’s own money in and out of specified assets. Traders usually shop around for the best price and conduct their business by phone, liaising with the broker in the middle. They will also look around for optimum deals on assets they may deem profitable at some stage and execute them accordingly. A trading desk may be operating on behalf of one high-net-worth person. They could also operate on behalf of an institution, such as a pension fund or an investment bank.

Does the trading desk make money?

A trading desk is often considered one of the most profitable units of any investment bank or large corporation. They're the eyes and ears on the floor, looking for price differentials and attractive purchase opportunities. The amount of money they move, particularly in investment banking, is staggering. Some traders will oversee funds upwards of $100 billion a day.

Obviously, the results and risks are enormous with this level of capital available. The trading desk is considered one of the most challenging and stressful parts of any financial institution. Traders’ bonuses are often sky-high, but they must prove they can turn over considerable profits before receiving them. This includes making money for their clients before they are eligible for a significant bonus. 

Last thoughts

As discussed in this article, the idea of a trading desk has gone from a large group of traders to a beginner trader with access to a mobile phone and a high-quality mobile trading app. You, too, could potentially make money, even if you are new to the space and still learning the ropes. All the top traders started somewhere. By being flexible and adapting to changes in this space, you stand a good chance of making profits and becoming a successful trader with a new income stream.