Non-Member Trader

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.

BREAKING DOWN '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. Non-Member Banks

    A bank that is not a member of the U.S. Federal Reserve System. ...
  2. Member

    1. In the most general context, a brokerage firm (or broker) ...
  3. Allied Member

    A person who is not a member of the New York Stock Exchange (NYSE) ...
  4. Member Firm

    A broker-dealer in which at least one of the principal officers ...
  5. Basel Committee On Bank Supervision

    A committee established by the central bank governors of the ...
  6. Local

    Traders on future exchanges who may fill public orders occasionally, ...
Related Articles
  1. Economics

    Explaining Economic Integration

    Economic integration reduces or eliminates trade barriers among nations, and coordinates monetary and fiscal policies.
  2. Forex Strategies

    An Introduction To Trading Forex Futures

    We explain what forex futures are, where they are traded, and the tools you need to successfully trade these derivatives.
  3. Trading Strategies

    What is the Difference Between Institutional Traders and Retail Traders?

    The differences between retail and institutional traders lie in the size of the trade, level of sophistication, and the speed of transactions.
  4. Professionals

    A Day In The Life Of A Day Trader

    Day trading has many advantages and, while we often hear about these perks, it's important to realize that day trading is hard work.
  5. Forex Education

    How Much Trading Capital Do Forex Traders Need?

    Even a small pip profit can mean substantial percentage returns over time.
  6. Investing Basics

    What's an Exchange?

    An exchange is an organized marketplace where securities and other financial instruments are traded.
  7. Options & Futures

    Stock Options and Weekly Options

    Stock option are one of the most straightforward option types. Day traders may be particularly interested in weekly options--options listed with only one week to expiry. Weekly options provide ...
  8. Trading Systems & Software

    Top 10 Brokerage Firms For Day Trading

    Day traders have different needs from long-term investors. Investopedia rates the top 10 brokerage firms for day traders.
  9. Options & Futures

    Trading Psychology: Consensus Indicators - Part 2

    Professional market players are some of the best models for the individual small trader to mimic.
  10. Forex Education

    Forex Trading: A Beginner's Guide

    Learn about the forex market and some beginner trading strategies to get started.
RELATED FAQS
  1. What does membership in the New York Stock Exchange entail, and why is it known as ...

    Owning a seat on the New York Stock Exchange (NYSE) enables a person to trade on the floor of the exchange, either as an ... Read Answer >>
  2. What does a futures contract cost?

    Learn about values of futures contracts and the initial margin a trader must place in an account to open a futures position, ... Read Answer >>
  3. What is the difference between extensive margin and intensive margin in economics?

    Find out why it is important for traders to understand the difference between initial margin requirements and maintenance ... Read Answer >>
  4. What kinds of derivatives are traded on an exchange?

    Learn about the different types of derivatives traded on exchanges, including options and futures contracts, and discover ... Read Answer >>
  5. How does a company switch from one stock exchange to another?

    A publicly traded company can, in fact, switch to a stock exchange that it believes will be favorable to its financing efforts. ... Read Answer >>
  6. How do financial advisors execute trades?

    Understand how financial advisors normally execute an investor's trades. Learn about the different type of markets and exchanges ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center