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.


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.

  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. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four ...
  6. Financial Asset

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