Local Exchange Trading Systems

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  2. Top 7 Questions About Currency Trading ...
    Forex Education

    Top 7 Questions About Currency Trading ...

  3. Getting Started In Forex
    Options & Futures

    Getting Started In Forex

  4. The International Money Market
    Forex Education

    The International Money Market

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

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

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

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

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

    A form of short-term borrowing for dealers in government securities.
Trading Center