Trading Assets


DEFINITION of 'Trading Assets'

A collection of securities held by a firm that are held for the purpose of reselling for a profit. Trading assets are recorded as a separate account from the investment portfolio. Trading assets may include U.S. Treasury securities, mortgage-backed securities, foreign exchange rate contracts and interest rate contracts. Trading assets include those positions acquired by the firm with the purpose of reselling in the near term in order to profit from short-term price movements.

BREAKING DOWN 'Trading Assets'

Trading assets are recorded at the fair value when they are purchased and sold. When trading assets are held by banks for other banks, they are recorded as marked-to-market, thereby adjusting to the current market value. Certain banks are required to file reports with the government and the Federal Deposit Insurance Corporation (FDIC) to report this activity.

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