Local Exchange Trading Systems


DEFINITION of 'Local Exchange Trading Systems'

A locally organized economic organization that allows members to participate in the exchange of goods and services among others in the group. Local Exchange Trading Systems (LETS) use a locally created currency as denominations of units of value which can be traded or bartered in exchange for goods or services. Members of LETS typically view the systems as organized and cooperative schemes that maximize purchasing power while benefiting members and the community.

BREAKING DOWN 'Local Exchange Trading Systems'

Local Exchange Trading Systems typically exhibit five fundamental traits: cost of service, consent, disclosure, equivalence to the regional currency, interest-free. These traits along with general guidelines such as membership fees, detailed logs of transactions and member directories allow for an organized and well run exchange. Additionally, transactions do not necessarily require a nominal exchange of units. For instance, members can repay other members who have performed for them a service by providing a service in return, as opposed to paying for the original service.

  1. Capitalism

    A system of economics based on the private ownership of capital ...
  2. Socialism

    An economic and political system based on public or collective ...
  3. Classical Economics

    Classical economics refers to work done by a group of economists ...
  4. Invisible Hand

    A term coined by economist Adam Smith in his 1776 book "An Inquiry ...
  5. Free Enterprise

    An economic system where few restrictions are placed on business ...
  6. Electronic Communication Network ...

    An electronic system that attempts to eliminate the role of a ...
Related Articles
  1. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  2. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  3. Options & Futures

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  4. Forex Education

    The International Money Market

    Banks, corporations, traders and speculators all use the IMM to borrow, lend, trade, profit, finance, speculate and hedge risks.
  5. Forex Strategies

    Strategies For Forex Algorithmic Trading

    Algorithmic trading strategies, such as auto hedging, statistical analysis, algorithmic execution, direct market access and high frequency trading, can expose price inconsistencies, which pose ...
  6. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  7. Forex Education

    The Basics Of Forex Algorithmic Trading

    Much of the growth in algorithmic trading in Forex markets over the past years has been due to algorithms automating certain processes and reducing the hours needed to conduct foreign exchange ...
  8. Trading Strategies

    How To Learn From Your Trading Mistakes

    What distinguishes a good trader from a mediocre one is his or her ability to learn from mistakes and use the experience to avoid making the same errors again.
  9. Trading Strategies

    The Pros & Cons Of Being A Trader On The West Coast

    There are certain benefits and drawbacks that go with being a trader on the West Coast of North America.
  10. Investing

    How Nasdaq Makes Money

    NASDAQ provides a marketplace which offers money-making opportunities to investors. Investopedia explains how NASDAQ makes money.
  1. What is the difference between the equity market and the stock market?

    The terms "equity market" and "stock market" are synonymous, both referring to the equity interests in publicly held companies, ... Read Full Answer >>
  2. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    The primary advantages for a company of listing on the Nasdaq exchange are lower listing fees and lower minimum requirements ... Read Full Answer >>
  3. What kinds of derivatives are traded on an exchange?

    There are many different types of derivatives traded on exchanges including options, futures, swaps and forward contracts. ... Read Full Answer >>
  4. What is the definition of "Financial Instruments Business" under the FIEA?

    The Financial Instruments and Exchange Act (FIEA) defines a financial instruments business as any firm with the primary business ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!