Moving on to the sell side. These are the creators and distributors of financial instruments. A prominent example of sell side organizations are investment banks. These institutions are the engineers of financial products and are pivotal in underwriting and selling securities to help their clients raise capital. They facilitate the entry of new securities into the market, but they're not just product and securities creators. They also provide another range of critical services, which are often referred to as sales and trading services.

The relevant divisions provide their clients access to existing securities, currencies, commodities, and related derivatives. Their expertise lies in understanding the pulse of the market, harnessing this knowledge to facilitate trades and offer insightful research to investor clients. Investment banks are often termed broker dealers, a dual role encompassing brokerage and dealing activities. If a firm executes orders on behalf of clients by finding other market participants that are willing to trade in the opposite way, it acts as a broker. Brokers arrange trades and profits are made by charging fees or commission for the service. As a dealer, the firm acts as a principle in the transaction, trading securities from its own inventory with clients. Dealers enter into trades themselves, which means they provide liquidity by taking the other side. Profits are made by pocketing the difference between purchase and sales prices. If the purchase and sale do not occur simultaneously, the dealer firm is exposed to an adverse change of the market price, and this is generally referred to as market risk.