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Proprietary trading (also known asprop trading) occurs when atrader tradesstocks,bonds,currencies,commodities, theirderivatives, or other financial instruments with the firm's own money (instead of using customer funds) to make a profit for itself.[1]
Proprietary traders may use a variety of strategies such asindex arbitrage,statistical arbitrage,merger arbitrage,fundamental analysis,volatility arbitrage, orglobal macro trading, much like ahedge fund.[2]
TraderNick Leeson took downBarings Bank with unauthorized proprietary positions. UBS traderKweku Adoboli lost $2.3 billion of the bank's money and was convicted for his actions.[3][4]
Armin S, a German private trader, suedBNP Paribas for 152m EUR because they sold to himstructured products for 108 EUR each which were worth 54 00 EUR.[5]
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