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I believe that those 'Trading and Investment' profits include profits from
the bid/ask spread in the markets in which an IB makes the market. They
also include mark ups on bonds and equities that are much closer to
commissions than pure directional trading profits.
ie. You purchase an OTC stock for 50 that their trader bought from the
street when your order was received for 49.89. That .11 is counted as a
trading profit, when it is really a commission. An insurance co. wants some
certain bonds which the IB "trader" buys on the street for 99 30/32 and
sells to the co. for 100. Those 2/32's are considered trading profits.
They make a market in XYZ stock buying and selling 1000's of shares all day.
There is a .05 b/a spread which they make on each rt.
Not that these things don't take talent or can not result in losses;
however, they are a far cry from my buying a Live Cattle future or 1000
shares of GM. In fact my trading edge must overcome the "trading Profits"
that the IB or floor broker makes.
I would not assume that b/c an IB shows large trading profits that it is
making a lot of profitable trades in the sense that most speculators would
define a trade.
sb
----- Original Message -----
From: "d graham" <dtgraham@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, May 23, 2001 7:57 PM
Subject: Re: [RT] DA moon and Delta
> > I think if you take a look at their overall trading record you will be
> surprised
> > at the profit and loss statements from their trading department. It is
> the
> > mergers and acquisitions that make them the money along with their
> banking and
> > IPO operations.
>
> Here we go again. Throw out a statement, no proof. Yet if you go to the
> Goldman Sachs site you will see:
>
> Revenues from Investment Banking 1st quarter 2001 $1.15 billion
>
> Revenues from M & A $730 million
>
> Revenues from Trading and Investments $2.30 billion
>
> http://www.gs.com/shareholders-docs/earnings/q1_2001.html
>
> Only gross raw figures but certainly on their face not supporting your
> statement
>
> Again, not criticising anyone in particular. We all, myself included,
daily
> act on perceptions which are not necessarily based on reality.
>
> dave
>
> ----- Original Message -----
> From: "Ira Tunik" <irat@xxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, May 23, 2001 8:12 PM
> Subject: Re: [RT] DA moon and Delta
>
>
>
> >
> > Norman Winski wrote:
> >
> > > ----- Original Message -----
> > > From: "DH" <catapult@xxxxxxxxxxxxxxxxxx>
> > > To: <realtraders@xxxxxxxxxxxxxxx>
> > > Sent: Wednesday, May 23, 2001 7:15 PM
> > > Subject: Re: [RT] DA moon and Delta
> > >
> > > > > It is funny that those who espouse a totally scientific approach
> fail to
> > > > > realize that almost every time the theorist enters the market he
> usually
> > > > > goes broke.
> > > >
> > > > Yeah, right. I hear Goldman and Solly and all the big houses are
> firing
> > > > their quants, scrapping their Crays, and hiring astrologers and that
> > > > tarot lady from late-night TV to read the tea leaves for them. :-)
> > > >
> > > > --
> > > > Dennis,
> > >
> > > You may be closer to the truth than you will ever know.
> > >
> > > Cheers,
> > >
> > > Norman
> > > >
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> > > >
> > > >
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>
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