DEFINITION of 'Floor Trader - FT'
An exchange member who executes transactions from the floor of the exchange exclusively for his or her own account. Floor traders used to use the "open outcry" method in the pit of a commodity exchange, but now most of them use electronic trading systems. They fulfill an important role in commodity and stock market by risking their own capital to trade futures, options or stocks, thereby providing liquidity and narrowing bid-ask spreads.
BREAKING DOWN 'Floor Trader - FT'
A floor trader is subject to a screening process before he or she can trade on the exchange. The National Futures Association requires floor trader applicants to file the following: Form 8-R completed online, fingerprint cards, proof from a contract market that the individual has being granted trading privileges, and a non-refundable application fee of $85.