Sell Side
Firms that facilitate securities transactions and provide research, underwriting, and trading services to investors — including investment banks, broker-dealers, and market makers.
What is Sell Side?
The sell side refers to the segment of the financial industry that creates, promotes, and sells securities, as well as providing research and market-making services to buy-side clients. Sell-side firms include investment banks, broker-dealers, market makers, and research boutiques. They generate revenue through underwriting fees, trading commissions, bid-ask spreads, and research subscriptions. Sell-side analysts publish equity research reports with buy, hold, or sell ratings on stocks — reports that are used (with healthy skepticism) by buy-side portfolio managers. Sell-side firms are intermediaries that connect issuers of securities (companies, governments) with investors, playing a central role in price discovery and market liquidity.
Example
When a company like Airbnb conducts its IPO, sell-side investment banks (Goldman Sachs, Morgan Stanley) underwrite the offering, help set the IPO price, market the shares to institutional investors, and earn underwriting fees. Afterward, their research analysts continue to publish earnings forecasts and price targets that buy-side managers factor into portfolio decisions.