Trading Capital

AAA

DEFINITION of 'Trading Capital'

The amount of money allotted to buying and selling various securities. Generally, trading capital is distinct from investment capital in that it is reserved for more speculative ventures. Trading capital is sometimes referred to as "bankroll."

INVESTOPEDIA EXPLAINS 'Trading Capital'

After determining how much trading capital to start with, many investors attempt to add to their capital by employing a variety of trade optimization methods. These methods attempt to make the best use of capital by determining the best percentage to invest each time. In order to be successful, it is important for investors and traders to determine the optimal cash reserves required for their trading or investing strategies.

RELATED TERMS
  1. Speculative Capital

    The funds earmarked by an investor for the sole purpose of speculation. ...
  2. The Kelly Criterion

    A mathematical formula relating to the long-term growth of capital ...
  3. Risk Capital

    Investment funds allocated to speculative activity. Risk capital ...
  4. Money Management

    The process of budgeting, saving, investing, spending or otherwise ...
  5. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
  6. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
Related Articles
  1. Achieving Optimal Asset Allocation
    Investing Basics

    Achieving Optimal Asset Allocation

  2. To Sell Or Not To Sell
    Retirement

    To Sell Or Not To Sell

  3. Basic Investment Objectives
    Options & Futures

    Basic Investment Objectives

  4. 6 Steps To A Rule-Based Forex Trading ...
    Forex Education

    6 Steps To A Rule-Based Forex Trading ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. 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. ...
  4. 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 ...
  5. 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. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center