Investopedia

Continue to Site »

Discretionary Account

Filed Under »
Dictionary Says

Definition of 'Discretionary Account'

An account that allows a broker to buy and sell securities without the client's consent. The client must sign a discretionary disclosure with the broker as documentation of the clients consent.

This is sometimes referred to as a "managed account."
Investopedia Says

Investopedia explains 'Discretionary Account'

Sometimes broad guidelines are set by the client regarding trading in the account. For example, a client might only permit investments in blue chip stocks.

Articles Of Interest

  1.

    Why You Shouldn't Manage Your Friends' Money

    Your pals may like your returns, but it isn't wise for you to manage their money.

  2. My broker just sold securities out of my account without my permission. Is this legal?

    Your broker's actions are not legal unless he or she sold the securities under certain conditions. Let's look at the two common instances in which your broker's actions are legal:First, if you ...

  3. Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.

  4. Role Of A Market Maker

    A market maker is a firm or an individual that stands ready to buy and sell a particular security throughout the trading session to maintain liquidity and a fair and orderly market in that security. ...

  5. Decline Of The Independent Broker-Dealer

    Since the financial crisis of 2008-2009 the numbers of independent broker-dealers have been steadily declining. Find out why, and if the trend will continue.

  6. What happens if I cannot pay a margin call?

    Minimum margin is the amount of funds that must be deposited with a broker by a margin account customer. With a margin account, you are able to borrow money from your broker to purchase stocks ...

  7. Bid-Ask Spread

    Find out more about this frequently referenced, but often misunderstood, term used to describe the price at which a stock is bought or sold at.

  8. What is a "wash sale"?

    The Wash-Sale rule was established to disallow a loss deduction of a security sold, if within 30 days of the date of the sale an investor buys substantially identical stock or securities, or ...

  9. What are some common hand signals on the trading floor?

    "Hand signal" is the sign language used by traders to transmit basic information on the trading floor. The use of hand signals on the trading floor is said to have originated for many reasons. ...

  10. When is it acceptable for a broker to commingle funds with a client?

    a. Never b. When he or she has written approval from the firm c. When he or she has written approval from the firm AND contributes equally to the account and shares equally in any losses ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center