Print service provided by iDogiCat: http://www.idogicat.com/
home logo





Home > Finance > Algorithmic Trading > Principal vs Agency

Principal vs Agency

Principal Bid: A transaction where a broker/dealer provide an investor with guaranteed execution of the trade list at the market prices at a specific point in time. All timing risk is transferred to broker/dealers. Investors are charged a premium for this.

Blind bid: investor provides only trade list statistics. Than broker/dealer defines the price.

Trading CostAgency ExecPrincipal Bid Transaction
CommissonYN
Price AppreciationYN
Market ImpactYN
Timing RiskYN
Opportunity CostYN
Premium FeeNY
Known PriceNY
Granteed FillNY
ForecastablilityDistribution of costSingle value estimate