Scalper

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DEFINITION of 'Scalper'

A person trading in the equities or options and futures market who holds a position for a very short period of time in an attempt to profit from the bid-ask spread.

A person who buys large quantities of in-demand items, such as new electronics or event tickets, at regular price, hoping that the items will sell out. The scalper will then resell the items at a higher price. Such transactions often occur on the black market. This type of scalping is illegal under certain conditions.

BREAKING DOWN 'Scalper'

The rapid trading that occurs in legitimate scalping usually results in small gains, but several small gains can add up to large returns at the end of the day. There is also an illegal type of scalping in investments in which an investment advisor purchases a security, recommends it as an investment, watches the price increase based on his recommendation, then sells the security for a profit.

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