Non-Member Trader

AAA

DEFINITION of 'Non-Member Trader'

A person or entity that does not have trading privileges or an exchange membership but who trades through a current member. Non-member traders do not have the same rights as member traders, which include the ability to execute trades on an exchange and authorization to have contracts under their name.

INVESTOPEDIA EXPLAINS 'Non-Member Trader'

Each exchange has its own specific set of requirements potential members must meet. For example, the New York Stock Exchangeitxtvisited="1">
(NYSE) is considered to have very strict requirements, and only allows a limited number of members to buy seats and earn the right to trade. Non-member traders might gain access through current members for speculation purposes or to hedge through derivatives to reduce risk. Some non-member traders could be subject to certain margin requirements when placing trades.

Brokerage firms that allow non-member traders and investors to execute trades at exchanges might also solicit and accept orders to buy or sell futures contracts, options on futures or retail off-exchange forex contracts.

RELATED TERMS
  1. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  2. Trading Floor

    The floor where trading activities are conducted. Trading floors ...
  3. Futures Commission Merchant - FCM

    A merchant involved in the solicitation or acceptance of commodity ...
  4. Trader

    An individual who engages in the transfer of financial assets ...
  5. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
  6. Strike Width

    The difference between the strike price of an option and the ...
RELATED FAQS
  1. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  2. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  3. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  4. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  5. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  6. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
Related Articles
  1. Personal Finance

    The Birth Of Stock Exchanges

    Learn how British coffeehouses helped give rise to the juggernaut that is the NYSE.
  2. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  3. Options & Futures

    The NYSE And Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.
  4. Active Trading

    Are You Under Or Overtrading?

    Under and overtrading can lessen an investor's profits. Find out how to fix these issues with a trading plan.
  5. Economics

    The Stock Market: A Look Back

    The past century was marked by furious economic change. What can it tell us about what lies ahead?
  6. Investing Basics

    Explaining Absolute Return

    Absolute return refers to an asset’s total return over a set period of time. It’s usually applied to stocks, mutual funds or hedge funds.
  7. Economics

    Why The Dollar’s Strength Can Continue

    Overall, the U.S. dollar has rallied this year, with the Dollar Index (DXY) now up by roughly 8 percent year-to-date, but the gain hasn’t been steady.
  8. Investing

    Acorns: The Perfect Investing Tool For Millennials

    We look at how the Acorns app works, how it makes money, and why is it innovative.
  9. Options & Futures

    How to Make Money by Trading Index Options

    Index options are less volatile and more liquid than regular options. Understand how to trade index options with this simple introduction.
  10. Investing

    4 Structured Product Types Wealthy Clients Love

    High-net-worth investors find structured products appealing for a variety of reasons. Here's a look at four types.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
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!