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Quantitative Finance · Glossary

What is Flow trading and franchise?

Also known as: flow trading · franchise

Definition 2.3 Markets I: The Ecosystem and Exchange-Traded Markets · Chapter 2 — The Sell Side

Flow trading is market making to clients: the desk quotes on request, takes the other side, and manages the inventory that results. The desk’s franchise is the stream of client enquiry it sees; its value is both the spread earned on that flow and the information the flow carries about who wants to do what.

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