Limited Trading Authorization

Definition of 'Limited Trading Authorization'


A level of trading authorization that gives an agent or broker the power to place orders or make inquiries concerning a client's account. Limited trading authorization allows the agent to act on behalf of an investor, but does not allow for the dispersement of account funds.

Investopedia explains 'Limited Trading Authorization'


A step down from full authorization, limited trading authorization allows a broker or agent to purchase and sell securities at his or her discretion. This is often used when a client does not know much about investing, and trusts the broker to properly manage his or her account. In circumstances where the client is a knowledgeable investor, limited authorization can allow the client to capitalize on broker recommendations.


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