Independent Brokers & Traders

Actor Type: Trader Breaks When: Market stability Capital Intensity: Low Cash Flow Stability: Highly volatile Economic Nature: Arbitrage Margin Driver: Volatility Performs Best When: Severe shortages Pricing Power: Strong (in crisis) Primary Function: Spot sourcing & resale Primary Risk Transfer Mechanism: None Primary Risks Held: Price & inventory risk Public / Private Mix: Mostly private Representative Firms: Fusion Worldwide; Smith Residual Risk After Transfer: High Revenue Model: Trading spreads Typical Margin Profile: Very high (episodic) Value Chain Segment: Financial Who Ultimately Bears the Risk?: Owners