Trading Authorization

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DEFINITION of 'Trading Authorization'

The level of power entrusted to a broker or agent granting specific levels of access to a client's account. Trading authorization dictates what actions an agent may perform, such as buying or selling. This is similar to the concept of power of attorney, but only deals with the client's trading account. 

BREAKING DOWN 'Trading Authorization'

Investors may authorize an agent by filling out the required documentation. The client will likely be able to choose between granting either full or limited authorization, with the latter restricting the agent from withdrawing funds from the account. Once trading authorization has been established, an agent may purchase and sell securities on the client's behalf, make inquiries into the account and possibly withdraw or transfer funds.

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