Prop trading

Banks usually trade shares for one of three reasons. First, they may be acting as a broker to a client – an institution such as a pension fund or an individual. Or the bank may be acting as a market maker – buying and selling securities to fulfil its obligation to an exchange in order to allow other investors to trade.

However, proprietary trading involves banks risking their own capital to make money. They may trade equities, but also bonds, currencies or commodities. Prop trading is pure speculation and can trigger big profits or losses. For that reason critics argue that it should be split away from much safer activities, such as accepting deposits and making loans, if banks are to retain the right to future taxpayer-funded bail-outs.

Paul Hodges: house prices could fall 50% in 'Great Unwinding'

Merryn Somerset Webb interviews Paul Hodges about deflation, the global economy's 'Great Unwinding', and how Britain's house prices could halve.


Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


28 January 1896: The world's first speeding ticket

119 years ago today, motorist Walter Arnold was caught tearing through Paddock Wood in Kent at a hair-raising 8mph, and became the first driver in the world to receive a speeding ticket.