What is a Trading Book?
Trading books are essentially the portfolios of large financial institutions. The typical trading book will contain information about all the securities currently held by the institution, as well as the history of any and all accounting transactions involved in the buying and selling of the securities recorded in the book. This makes the trading book a relatively simple resource that can be used to quickly track any of the investment activity made by the institution. All types of investment activity are included in the trading book. This level of detail is very helpful when considering some type of new transaction that will impact the assets of the bank or financial institution. Should the bank wish to consider establishing a bid/ask spread in conjunction with a possible purchase or sale, reviewing the transaction details recorded in the trading book may prove helpful as part of the process of evaluating the proposed action. In like manner, the information contained in the trading book
