Trader

AAA

DEFINITION of 'Trader'

An individual who engages in the transfer of financial assets in any financial market, either for themselves, or on behalf of a someone else. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer term time horizon, whereas traders tend to hold assets for shorter periods of time in order to capitalize on short-term trends.

INVESTOPEDIA EXPLAINS 'Trader'

One main problem with engaging in short-term trading is commission costs. Because traders frequently engage in short-term trading strategies to chase after profit; they often rack up large commission fees. However, an increasing number of highly competitive discount brokerages has made this cost less of an issue.

RELATED TERMS
  1. Trading Rut

    A period of investing during which a trader fails to earn profits ...
  2. Overextension

    A loan or extension of credit that is larger than what the borrower ...
  3. Blue Collar Trader

    A trader who has another source of income, and does not trade ...
  4. Bond Crowd

    A slang term used to describe members of the stock exchange that ...
  5. Head Trader

    The manager of a trading business. He or she is responsible for ...
  6. Financial Asset

    An asset that derives value because of a contractual claim. Stocks, ...
Related Articles
  1. How To Break Bad Trading Habits
    Active Trading

    How To Break Bad Trading Habits

  2. Are You Investing Or Gambling?
    Investing Basics

    Are You Investing Or Gambling?

  3. The Roles Of Traders And Investors In ...
    Investing Basics

    The Roles Of Traders And Investors In ...

  4. An Introduction To Day Trading
    Active Trading Fundamentals

    An Introduction To Day Trading

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center