Trading Capital

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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.

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