Increased profitability is one of the advantages of proprietary trading.Unlike when working as a broker and receiving commissions, prop trading allows the firm to keep 100% of the gains.The bank reaps the most benefits from the trade as a proprietary trader.
Another advantage of proprietary trading is that it allows a company to keep a stockpile of securities for future usage. If the firm purchases securities for speculative purposes, it can later sell them to clients who are interested in purchasing them. Clients who want to sell short can also borrow the securities. Prop trading allows businesses to swiftly become market leaders.