Cash Trading

What Does Cash Trading Mean?
A method of buying or selling securities by providing the capital needed to fund the transaction without relying on the use of margin. Cash trading is achieved by using a cash account, which is a type of brokerage account that requires the investor to pay for securities within two days from when the purchase is made.

Investopedia explains Cash Trading
Cash trading is unlike margin trading because the account holder cannot borrow money from the broker to fund the transaction. Cash trading involves less risk than margin trading, because risk is limited to only the cash invested.

Related Terms

Cash Account
Leverage
Margin
Margin Account
More Related Terms

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