On the Street, the Tough Crowd Rules

By Amey Stone

BYE-BYE, LITTLE GUY. And it's not just hedge funds using these strategies. Brokerages and investment banks are increasingly making profits from their own proprietary desks, where traders act as in-house hedge-fund managers investing the firms' own capital. Even the more plain-vanilla mutual-fund industry is increasingly turning out funds that use hedge-fund-like techniques -- short-selling and layering on options -- to improve returns while reducing risk. At least that's the theory.

All this is happening at the same time individual investors continue to take to the sidelines. At Charles Schwab, still the king of the discount brokerages despite a slump in its business, revenue from t

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