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no, the buy side is long. the sell side is selling things like IPOs, etc. that the buy side might want to buy. sometimes they provide liquidity, sometimes they'
by RockyMcNuts 13y ago
no, the buy side is long. the sell side is selling things like IPOs, etc. that the buy side might want to buy. sometimes they provide liquidity, sometimes they're just an agent and rent-seeker.
markets, trades, liquidity are a means to an end, not an end in themselves. every trade is a friction and a cost, and only happens because the two sides aren't happy with their portfolio.
"more friction in your machine is generally bad and just creates heat."
"oh, but that's not meaningful, people who make sandpaper and grippy tires are needed to create friction"
"..."
- tptacek 13y agoThe buy-side does not become the sell-side when it tries to exit a position. Buy-side: mutual fund. Sell-side: market maker.
- harryh 13y agoYour uses of the terms "buy-side" and "sell-side" do not conform to how the financial community (of which the author of this blog post is a member) uses them. It's not the buying vs selling of securities. It's the buying vs selling of financial services (of which liquidity is one).
- RockyMcNuts 13y agoYour definition is probably better but I wouldn't expect more than 20% of people in the industry to define it correctly that way. (and the buy side is selling financial services to someone too...the buy side holds portfolios of securities, sell side makes money generating transactions...distinction can get quite arbitrary when you have buy side strategies that involve lots of transactions and selling liquidity) bottom line is... greasing the wheels of commerce good, making wonky wheels so some goofball can sell more grease services bad.