The differences between the equity capital markets, or ECM, and trading desks can be identified by considering the services that they offer, the markets that they focus on, whether they have access to inside information, and how they earn fee income for the bank. In terms of the equity capital market desks, or ECM, the main services they are providing to clients is advice on equity or equity-based products. This may involve advising a client that is going through an acquisition on how to finance that acquisition through issuing new shares. ECM will also be involved in potentially identifying investors for IBD, or investment banking transactions. If a client of the investment banking division is going through an IPO, ECM may help to identify potential investors in that IPO. The trading desk, however, will engage in transactions with clients directly using the bank's own balance sheets and can also execute trades on behalf of clients through an exchange or with another counterparty. The trading desk will also provide advice to those clients on whether to execute trades, whether it is worth buying, or holding, or selling particular securities. And the trading desk may also get involved in market making, which involved quoting prices, both a bid and an offer price, for buying and a selling price in relation to a particular security at a time to provide liquidity in the trading of that security.

In terms of the market focus, ECM is focused on primary markets, so the initial issuance of securities, whereas the trading desk is focused on secondary markets, which is trading securities which are already in existence. ECM may well have access to inside information. If you're advising a company how to finance a takeover, you'll have knowledge of that takeover, which will be potentially inside information, whereas the trading desk will not have access to that same inside information. The advice that they are providing to clients is based on their own analysis and research that they have considered, as well as observing current market trends. ECM earns fees for the bank on an advisory fee basis, whereas the trading desk earns income for the bank based on commission or brokerage fees, and on a market making basis, earns a profit based on the differences between the bid and the offer, or the bid and the ask prices that they are quoting.