The buy side of the trading industry consists of investors (both individual and institutional, mutual funds, trusts, insurance funds, pension funds, endowments, money managers, etc), hedgers, borrowers, asset exchangers, and gamblers. These participants run the gamut from individuals, firms, funds, and governments which all use the exchange services provided by the sell side to meet their respective needs and requirements. Investors typically buy exchange services relating to stocks and bonds. Exchange services sough by other participants on the buy side are those relating to mortgages and debt instruments (bonds, notes, etc) for borrowers; swaps, forward contracts, and futures contracts for hedgers; currencies and commodities for asset exchangers; and various types of instruments for gamblers.
Buy-side institutions (pension funds, mutual funds, endowments, trusts, etc) are referred to as investment sponsors. Investment sponsors employ investment managers to manage their funds. In turn, investment managers seek the services of buy-side traders to execute their trading decisions.
The following table summarizes trader types and respective purposes of trading, and sets out examples for each type:
| Trader Type | Examples | Purpose of Trading |
| Investors | – Individual investors – Institutional investors | To invest wealth for future return (individual investors do so for their own, while institutional investors do it for their customers) |
| Hedgers | – Financial institutions (banks, insurers,..) – Producers (farmers, manufacturers,..) – Service providers (shippers, transporters) | To mitigate or reduce risks associated with their operations |
| Borrowers | – Firms – Banks – Homeowners – Consumers | To invest future wealth now |
| Asset exchangers | – Manufacturers – International companies – Travelers | To exchange assets from one form to another (usually to a desired form) |
| Gamblers | – Individuals | To amuse or enjoy themselves |
