Trade

DEFINITION of 'Trade'

A basic economic concept that involves multiple parties participating in the voluntary negotiation and then the exchange of one's goods and services for desired goods and services that someone else possesses. The advent of money as a medium of exchange has allowed trade to be conducted in a manner that is much simpler and effective compared to earlier forms of trade, such as bartering.

In financial markets, trading also can mean performing a transaction that involves the selling and purchasing of a security.

BREAKING DOWN 'Trade'

Trading is not a new phenomenon - we've been doing it for centuries! The trade that occurred among the most primitive humans has evolved considerably over time, and the word "trade" has come to include the complex trading that occurs on the floor of the New York Stock Exchange (NYSE).

However, the basic elements of buying and selling in some form of a market haven't changed a bit, because ultimately, trade still involves giving one thing in exchange for another.

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