Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Sell Side

What it is:

Sell side, sometimes called prime brokers, refers to investment firms which sell securities and assets to money management firms and corporate entities. They may be considered intermediaries which both perform research and conduct the actual purchase of securities.

How it works (Example):

Sell side firms are registered members of a stock exchange and they take orders from buy side firms. The services they offer include brokering, dealing, advisory services and investment research.

In short, they both generate trading ideas and execute trades.

Sell side firms charge buy side firms for the product (the stock), the cost of trading the stock (the trader's salary) and the cost of the research (the analyst's salary). Many sell side firms now delineate the cost of their products so that purchasing firms know they are paying an appropriate price for the best research available.

Why it Matters:

Companies on the sell-side of the financial industry seek to derive value by carefully researching stocks to fit their clients' individual investment strategies and by directly purchasing the securities off of the markets.

Buy side and sell side firms are the direct participants of every trade made on an exchange.

Related Terms View All
  • Quitclaim Deed
    For example, let's say John Doe and Jane Doe are married and live in a house that they...
  • YTD
    Let's assume Company XYZ's fiscal year began on January 1 and that today is March 31....
  • Natural Capital
    Let's say Company XYZ is a paper manufacturer. It owns 50,000 acres of forestland in...
  • Z-share
    For example, let's say John Doe works in the human resources department of the XYZ Fund...
  • Z
    On the Nasdaq market, for example, the letter Z after the ticker (an XYZ Company security...