The Trade Lifecycle: Behind the Scenes of the Trading Process, 2nd Edition

Foreword from the First Edition

Trading has evolved from a humble apple grower wanting a stable price for his produce come harvest time, to a complex and exciting industry comprising a significant share of the global economy.

Trading is the fundamental activity of investment banks, hedge funds, pension funds and many other financial companies. There is no better way to understand the workings of a financial entity than to follow the progress of a trade through its lifecycle and all the activities performed upon it.

This book will dissect a trade into its components, track it from conception to maturity and describe the raison d'etre of the business functions of a financial entity all arising from the processing of a trade. Having seen the full path of a trade, the reader will gain a more complete view of the world of finance which will answer some fundamental questions such as why, what and how people trade.

Derivatives are complex variations of standard trades. By contrast and comparison with the lifecycle of standard trades the reader will glean a better understanding of these often misunderstood financial instruments.

Together with the trade itself, the book will explore essential activities such as booking, confirmation, settlement, risk management, legal obligations, finance and control functions such as credit, market risk and auditing. Almost every person working in an investment bank or hedge fund has a large part of their work connected to the lifecycle of a trade. ...