Commercial Trader

Filed Under » ,
Dictionary Says

Definition of 'Commercial Trader'

A classification used by the Commodity Futures Trading Commission (CFTC) to describe traders that use the futures market primarily to hedge their business activities.
Investopedia Says

Investopedia explains 'Commercial Trader'

This type of classification is usually given to futures commission merchants, foreign brokers, clearing members or even investment banks that buy index futures to hedge current long positions. An increase in commercial traders' long positions in a certain commodity may mean these traders believe the price of the commodity will increase, in which case they would not want to be adversely affected by missing out on a price increase.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Commodity Futures Trading Commission ...

    An independent ...
  2. Hedge

    Making an ...
  3. Futures

    A financial ...
  4. Futures Contract

    A contractual ...
  5. Open Interest

    1. The total ...
  6. Long (or Long Position)

    1. The buying of ...
  7. Trader

    An individual ...
  8. Volatility

    1. A statistical ...
  9. Risk Capital

    Investment funds ...
  10. Price Risk

    The risk of a ...

Articles Of Interest

  1. Forecast The FX Market With The COT Report

    Three empirical findings on futures data can help currency traders determine buy and sell points.
  2. Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  3. Intro To Open Interest In The Futures Market

    Applied primarily to the futures market, this indicator confirms trends and reversals.
  4. Using Open Interest To Find Bull/Bear Signals

    Volume should inform your use of this indicator in confirming trends and reversals.
  5. Retirement Savings Tips For 35- To 44-Year-Olds

    Learn how the "sandwich generation" can save for retirement while taking care of their kids and parents.
  6. Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  7. Risk Tolerance Only Tells Half The Story

    Just because you're willing to accept a risk, doesn't mean you always should.
  8. Finding Your Investing Comfort Zone

    Choosing the right investments for you is the best way to feel comfortable with your portfolio.
  9. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.
  10. Simplify Your Portfolio

    Faced with an overabundance of choices, many investors forget to stick to the basics.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center