Spice Trader

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DEFINITION of 'Spice Trader'

A slang term used to describe an investor who tends to trade in high-risk investment vehicles or markets. Spice traders prefer to invest in riskier endeavors and seek higher risk premiums for the risk that they take on.

BREAKING DOWN 'Spice Trader'

A spice trader can invest in any number of investment vehicles or markets. Investing in emerging or frontier markets, junk bonds, exotic options, and derivatives and stocks trade on the pink sheets are all investments that a spice trader may take on. The primary motive for a spice trader is to increase returns by investing in high-risk, highly speculative assets/debentures/markets. As a result, spice traders are able to demand a greater premium for the increased risk that they take on.

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RELATED FAQS
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    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
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