The Proprietary Trading team of Equita, within the Global Markets division, executes proprietary trading and brokerage transactions, offering a full range of services whilst maintaining a risk level that is in line with a prudent capital management strategy.
Directional trading is all trading that Equita carries out on its own account using proprietary strategies and that typically include a degree of risk. Nevertheless, this risk is monitored constantly by the team.
In general, directional trading includes activities such as:
"Pure" directional trading – trading in stocks, derivatives, bonds and ETFs using investment strategies based on fundamental analysis, technical analysis and/or news on corporate issuers and/or market-sensitive news;
Risk arbitrage & special situations – valuations (using special algorithms) of investment opportunities based on "relative value" strategies as well as investment opportunities arising from corporate actions and/or other extraordinary corporate transactions or events such as capital increases and public tender offers and/or exchange offers;
Volatility trading – market making in options on stocks listed on the FTSE MIB index; the team displays buy and sell quotes on stocks to inject liquidity within the parameters set by the manager and in compliance with current regulatory provisions.
Client-Driven and Market Making
Client-Driven and Market Making are proprietary trading activities where the stock trades are posted on the book, some of which are immediately sold to clients. Client-Driven trades do not typically entail risk. More specifically, Client-driven transactions are client orders executed over the counter and where Equita's book balance is zero at the end of the business day; Market Making is where Equita undertakes to provide liquidity in the market for bid-ask or bid only.
Generally, the Client-Driven and Market Making segment includes the following activities:
- Specialist – acting as Specialist on behalf of clients and on own accounts, in bonds traded on the MOT, EUROTLX, HI-MTF, certificates traded on SeDeX and EUROTLX, stocks traded on the MTA and AIM Italia indexes, with the aim of raising liquidity in line with the parameters set by the manager and in compliance with regulatory provisions;
- Brokerage – proprietary trading services involving client orders for debt instruments not traded on regulated markets, ETFs and stocks;
- Market Maker – market making activities in stocks listed on the FTSE MIB index and bonds; the Proprietary Trading team displays buy and sell quotations in order to inject liquidity within the parameters set by the manager and in compliance with the relevant regulatory provisions.
Focus on Fixed Income
The Proprietary Trading team also provides brokerage services on debt securities. Equita covers the entire value chain, from the primary market to the secondary market and market making.
Equita acts as a primary partner for bond placement and brokerage services, providing banking sector players with essential liquidity services. Using its proprietary books, Equita quotes around 400 high liquidity bonds and 200 branded bonds addressed to retail clients on Italian and international markets for some issuers and banking groups.