# Trading Desks

> A trading desk is a team focused on one market or activity. Learn how bank and fund desks are organised by asset class, the roles on a desk and a typical day.

Source: https://learn.tradelabsai.com/industry/trading-desks/  
Track: The Trading Industry · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Trading Desks", https://learn.tradelabsai.com/industry/trading-desks/

A trading desk is a team of people who trade a specific market or perform a specific trading function, such as US equities, government bonds, foreign exchange or commodities. The term comes from the physical desks on trading floors, though much of the work is now electronic and teams may be spread across cities. Banks, hedge funds, asset managers and trading firms all organise around desks, and each desk has its own traders, limits, risk and P&L.

## How sell side desks are organised

| Division | Typical desks |
|---|---|
| Equities | Cash equities, electronic trading, program trading, equity derivatives, delta one, prime brokerage |
| Fixed income, currencies and commodities (FICC) | Government bonds (rates), credit, FX, commodities, securitised products, emerging markets |
| Each desk often splits into | Sales, trading (market making), structuring and electronic trading |

FICC and equities divisions are the two main pillars of investment bank trading businesses.

## Roles on a sell side desk

| Role | Job |
|---|---|
| Sales | Builds client relationships, brings client orders and ideas to traders |
| Trader (market maker) | Prices client trades, manages the desk's inventory and risk. See [Market Maker and Options Trader](https://learn.tradelabsai.com/industry/market-maker-and-options-trader/) |
| Structurer | Designs custom products, such as structured notes |
| Electronic trading and quants | Build pricing models and algorithms. See [Quant Developer and Trading Engineer](https://learn.tradelabsai.com/industry/quant-developer/) |
| Strategist and desk analyst | Market commentary and trade ideas |
| Risk and middle office | Monitor limits and P&L. See [Risk Analyst](https://learn.tradelabsai.com/industry/risk-analyst/) |

## Buy side desks

At asset managers and hedge funds, the trading desk executes the portfolio managers' decisions. Buy side traders choose brokers, algorithms and venues, manage market impact and measure execution quality. Some hedge funds have traders who also take positions directly. See [Execution and Sales Trader](https://learn.tradelabsai.com/industry/execution-and-sales-trader/).

## A day on a market making desk

| Time (New York) | Activity |
|---|---|
| Before the open | Read overnight news, Asia and Europe moves, check positions and risk |
| Morning meeting | Desk and sales discuss themes, client interest and economic data |
| 8:30 | Key US economic releases on many days. See [Trading Economic Releases](https://learn.tradelabsai.com/macro/trading-economic-releases/) |
| 9:30 to 16:00 | Quote clients, manage inventory, hedge risk, react to news |
| Afternoon | Closing auction orders, end of day positioning. See [Opening and Closing Auctions](https://learn.tradelabsai.com/market-structure/opening-and-closing-auctions/) |
| After the close | P&L review, risk reports, planning for the next day |

**Example: A client trade on a bond desk**
A salesperson receives a request from an insurance company to sell $50 million of a 10 year corporate bond. The trader quotes a price slightly below where they think they can resell it, a bid of 98.50, reflecting the bond's liquidity and current inventory. The client accepts. The desk now owns $50 million of the bond, so the trader hedges interest rate risk by selling Treasury futures, then sells the bond in smaller pieces to other clients over the next days at around 98.70. The 0.20 point difference on $50 million is $100,000 before hedging costs, compensation for using the bank's balance sheet and taking the risk. See [Corporate Bonds](https://learn.tradelabsai.com/bonds-credit/corporate-bonds/) and [DV01](https://learn.tradelabsai.com/bonds-credit/dv01/).

## Desk P&L and risk

Each desk has its own P&L, calculated daily, and risk limits such as position size, VaR and stop loss limits set by the firm's risk department. Desk heads answer for both returns and risk discipline. See [P&L and Performance Attribution](https://learn.tradelabsai.com/industry/performance-attribution/) and [Risk, Position, Loss and Drawdown Limits](https://learn.tradelabsai.com/portfolio/risk-limits/).

## The shift to electronic trading

Many markets that once relied on phone calls, such as FX and government bonds, now trade largely electronically. Desks increasingly use algorithms to quote and hedge automatically, with traders supervising the systems and handling large or complex trades. See [Algorithmic Trading Explained](https://learn.tradelabsai.com/algo-trading/algorithmic-trading-explained/).

## Frequently asked questions

### What is a trading desk?

A team within a bank, fund or trading firm that trades a particular market or performs a specific trading function, with its own risk limits and P&L.

### What is FICC?

Fixed income, currencies and commodities, one of the two main trading divisions at investment banks alongside equities.

### What does a buy side trading desk do?

It executes portfolio managers' investment decisions, choosing brokers, algorithms and venues to minimise costs and market impact.

Next, explore careers in trading in [Trading Careers Explained](https://learn.tradelabsai.com/industry/trading-careers-explained/).

## Continue learning

- Next lesson: [Trading Careers Explained](https://learn.tradelabsai.com/industry/trading-careers-explained/)
- Previous lesson: [Buy Side vs Sell Side](https://learn.tradelabsai.com/industry/buy-side-vs-sell-side/)
- Related: [Buy Side vs Sell Side](https://learn.tradelabsai.com/industry/buy-side-vs-sell-side/): The buy side invests money; the sell side provides trading, research and capital raising services. Learn the main firms, roles, incentives and career differences.
- Related: [Execution and Sales Trader](https://learn.tradelabsai.com/industry/execution-and-sales-trader/): Execution traders carry out portfolio decisions at the best cost; sales traders serve clients and route their orders. Learn the work and the skills.
- Related: [Market Maker and Options Trader](https://learn.tradelabsai.com/industry/market-maker-and-options-trader/): Market makers quote prices on both sides and manage the risk they take on. Learn what market making and options trading roles involve, key skills and interviews.
- Related: [FX, Rates, Credit and Commodity Traders](https://learn.tradelabsai.com/industry/fx-and-rates-traders/): What FX, rates, credit and commodity traders do at banks, funds and trading houses: their markets, daily drivers, skills and how these macro trading roles differ.
- Related: [Risk Analyst](https://learn.tradelabsai.com/industry/risk-analyst/): Risk analysts measure, report and control market, credit and operational risk at trading firms. Learn the daily work, key tools, skills and the risk career path.