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. Head Trader

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

    An asset that derives value because of a contractual claim. Stocks, ...
  6. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
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. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center