Held-For-Trading Security

AAA

DEFINITION of 'Held-For-Trading Security'

Debt and equity investments that are purchased with the intent of selling them within a short period of time (usually less than one year). Accounting standards necessitate that companies classify any investments in debt or equity securities when they are purchased. The investments can be classified as: held to maturity, held for trading or available for sale. Held-for-trading securities (or simply trading securities) are considered short-term assets, and their accounting is handled as such. Gains and losses resulting from changes in the investment's value are recorded as gains and losses on an income statement.

INVESTOPEDIA EXPLAINS 'Held-For-Trading Security'

Held for trading securities include debt and equity instruments that are held for short periods of time, purchased with the intention of profiting from short-term price changes. They are purchased with the intention of selling them in the near term. These debt and equity investments are reported at fair value, and unrealized gains and/or losses are included in earnings.

RELATED TERMS
  1. Capital Gains Treatment

    The specific taxes assessed on investment capital gains as determined ...
  2. Investment

    An asset or item that is purchased with the hope that it will ...
  3. Stock

    A type of security that signifies ownership in a corporation ...
  4. Return On Assets - ROA

    An indicator of how profitable a company is relative to its total ...
  5. Equity Derivative

    A derivative instrument with underlying assets based on equity ...
  6. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
Related Articles
  1. Accounting Rules Could Roil The Markets
    Bonds & Fixed Income

    Accounting Rules Could Roil The Markets

  2. Convertible Bonds: Pros And Cons For ...
    Bonds & Fixed Income

    Convertible Bonds: Pros And Cons For ...

  3. Capital Gains Tax 101
    Taxes

    Capital Gains Tax 101

  4. How should an accountant correctly record ...
    Fundamental Analysis

    How should an accountant correctly record ...

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center