Who trades with the desk
By SuperdayReps · Michigan Ross Undergrad | Wharton MBA · ex-Citi | ex-Greenhill · Former Head Mentor at a Leading IB Prep Service
14 min read · updated November 3, 2026
Every trade a desk does has a client on the other side, and the same bond can be sold by one client for the opposite reason another buys it. A pension fund buys a 30-year bond because it owes retirees money in 30 years. A hedge fund sells the same bond because it thinks rates are about to rise. A salesperson who knows which is which knows who to call when the desk needs to buy, and who to call when it needs to sell.
That is why interviewers ask who the clients are and what each one wants. Knowing the list shows you understand where flow comes from. Knowing what each one needs shows you could be useful in a sales seat in your first week.
Clients buy four things from a desk, in different mixes: liquidity (a price now, in size), hedging (taking off a risk they do not want), financing (borrowing cash or securities) and ideas (research, trade suggestions, a read on what other clients are doing). Match each client to the mix it needs and you can answer almost any client question.
The map of clients
| Client | What it is | What it wants most from the desk |
|---|---|---|
| Asset managers (mutual funds, ETFs, long-only funds) | Run large portfolios for savers, measured against a benchmark index | Liquidity and good execution in size; ideas |
| Hedge funds | Private funds that go long and short, use leverage, trade often | Financing, fast competitive prices, ideas |
| Pension funds | Owe retirees payments for decades | Long bonds and swaps that match those payments |
| Insurers | Hold bonds against future claims | Yield, credit quality, assets that match their liabilities |
| Corporates | Companies with real business exposures | Hedging: currencies, interest rates, commodities |
| Central banks and sovereign wealth funds | Manage national reserves or national savings | Liquidity in large size, and discretion |
The first two account for most of the trading on most desks. The rest trade less often but often in very large size.
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Frequently asked
- Who are a trading desk's clients?
- Mostly institutions. Asset managers such as mutual funds and ETFs, hedge funds, pension funds, insurance companies, corporations hedging business risk, and official institutions such as central banks and sovereign wealth funds. Individual investors mostly trade through brokers, not with a bank's sales desk.
- What is the difference between a mutual fund, an ETF and a hedge fund?
- A mutual fund is a public fund you buy into or redeem from once a day at its net asset value. An ETF holds a similar portfolio but its shares trade on an exchange all day, and dealers keep its price close to the value of its holdings by creating and redeeming shares. A hedge fund is a private partnership for wealthy and institutional investors that can borrow, short and trade freely, lets money out only monthly or quarterly, and charges a management fee plus a share of profits.
- What do gross and net exposure mean for a hedge fund?
- Gross exposure is longs plus shorts divided by the fund's capital, and it measures how big and levered the book is. Net exposure is longs minus shorts divided by capital, and it measures how much the fund is betting on the market's direction. A fund at 240 percent gross and 60 percent net is levered but only moderately long.
- Why has passive investing grown so much?
- Over long periods most active funds trail their benchmark index after fees, and index funds cost a few hundredths of a percent a year. ETFs made indexing easy to trade and tax efficient, and many retirement plans put savers into index-based funds by default.
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