In a securities company's business, buying and selling with the company's own funds is called proprietary trading (the dealer business). In OTC derivatives, banks and securities companies act as dealers and become the counterparty to customers' interest rate swaps and other trades. Dealers in yen interest rate swaps take the other side of customers' pay-fixed and receive-fixed trades alike. They usually hedge the resulting positions through opposite trades with other dealers and similar means1.

Notes

  1. Financial Markets Department, Bank of Japan, "店頭デリバティブ取引データからみた円金利スワップ市場" (The yen interest rate swap market as seen from OTC derivatives transaction data; in Japanese). ↩