Introduction A brief synopsis and short explanation of the basic elements that surround the trading function should be very helpful in providing an understanding of trading and how various transactions are performed and accomplished. Following the explanation of the securities trading process, we will endeavor to show the impact of the Internet on trading and its overall effect on how business is presently conducted and how it will probably be transacted in the future. The trading of securities can best and most clearly be defined as the execution of an order on behalf of a customer to buy or sell a specific security. The order could be a buy or sell order for stock, mutual funds, CD's, annuities, mortgages, CMO's, corporate, government and municipal bonds or any type of security. The types and composition of trading desks vary from dealer to dealer, normally depending upon the size of the dealer and the product mix he offers.
Trading is the lifeblood of the security industry.
The price one will buy or sell a security is responsible for the existence of a marketplace. It is my intention to explain some of the facets of fixed income bond trading with most of the emphasis on municipal bond trading. We will talk about the municipal market overall, trading aspects in particular and how the municipal market is being affected by the Internet. Secondly, there exists another more widely accepted definition that has an even greater and more widespread basis of understanding and acceptance within the industry. In the Fixed Income arena, it is the trader who facilitates the execution of the transaction and provides the sales and marketing personnel with bids and offerings and information how and where markets are priced and where, in the trader's mind, they are of value.