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."

BREAKING DOWN '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. Capital Markets

    Capital markets are markets for buying and selling equity and ...
  2. Capital Investment

    Funds invested in a firm or enterprise for the purposes of furthering ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Capital Flows

    The movement of money for the purpose of investment, trade or ...
  5. Venture Capital Trust - VCT

    A type of publicly listed closed-end fund found in the United ...
  6. Risk Capital

    Investment funds allocated to speculative activity. Risk capital ...
Related Articles
  1. Small Business

    Understanding Capital

    Capital has a variety of meanings, but it generally refers to financial resources.
  2. Investing

    Explaining Capital Employed

    Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue.
  3. Small Business

    Understanding Capital Investment

    Capital investment is a term that describes a company’s expenditures for long-term assets used in the operation of its business.
  4. Investing

    How Much Investment Risk Can You Handle?

    When determining the amount of investment risk you can handle, consider your time horizon and bankroll.
  5. Managing Wealth

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  6. Insights

    What's Economic Capital?

    While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures.
  7. Small Business

    Does Your Startup Need Venture Capital Money?

    Venture capital funding provides capital to grow a business. However, entrepreneurs will also lose some control over business decisions.
  8. Small Business

    Explaining Cost Of Capital

    Cost of capital is the cost of funds used to finance a business.
  9. Investing

    How Social Venture Capital Is Changing the World

    Learn what social venture capital is and the ways in which it differs from traditional venture capital. Identify two leading social venture capital firms.
  10. Investing

    Explaining Capital Flows

    The movement of money for investing, trade or business production, is commonly referred to as capital flows.
RELATED FAQS
  1. What is the difference between financial capital and economic capital?

    Read about the differences between types of financial capital, which companies use to raise money, and economic capital models ... Read Answer >>
  2. How does total capital investment influence economic growth?

    Discover the basic relationship between capital investment and economic growth, and why improving the capital structure increases ... Read Answer >>
  3. How is working capital different from fixed capital?

    Understand the differences between working capital and fixed capital, including definitions and examples of how businesses ... Read Answer >>
  4. How can I calculate capital employed from a company's balance sheet?

    Discover how to define and then use a simple method to measure a company's capital employed by looking only at its balance ... Read Answer >>
  5. Why might two companies calculate capital employed differently?

    See why not every company defines and measures capital employed in the same manner, and which methods are most common in ... Read Answer >>
  6. What is the difference between capital investment decision and current asset decision?

    Learn how capital investment decisions are long-term funding decisions, while current asset decisions are short-term funding ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center