Trading Account

Loading the player...

What is a 'Trading Account'

A trading account is an account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer.

2. An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a trading strategy rather than a buy-and-hold investment strategy.

BREAKING DOWN 'Trading Account'

1. Though trading accounts are traditionally thought to hold only stocks, a trading account can hold cash, foreign cash, securities and a number of other types of investments.

2. Investors who use a number of trading strategies or have a number of brokerage accounts may separate their accounts in order to avoid confusion. One account may be a registered account for their retirement savings; another account may be a buy-and-hold account for their long-term stocks; another may be a margin account; and another may be a trading account used for conducting day-trading activities.

RELATED TERMS
  1. Directional Trading

    Trading strategies based on the investor’s assessment of the ...
  2. Cleared Funds

    A balance in an account that is able to be withdrawn or used ...
  3. Mobile Trading

    The use of wireless technology in securities trading. Mobile ...
  4. Trading Platform

    Software through which investors and traders can open, close ...
  5. Account

    1. An arrangement by which an organization accepts a customer's ...
  6. Cash Account

    A regular brokerage account in which the customer is required ...
Related Articles
  1. Investing Basics

    What Is A Trading Account?

    A trading account enables an investor to buy and sell securities.
  2. Options & Futures

    Margin Trading

    Find out what margin is, how margin calls work, the advantages of leverage and why using margin can be risky.
  3. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  4. Trading Systems & Software

    Basics Of Trading Systems

    A trading system can save time and take the emotion out of trading, but adopting one takes skill and resources - learn more here.
  5. Trading Strategies

    How Does Securities Lending Work?

    Securities lending is the act of loaning a stock or other security to an investor or firm.
  6. Investing News

    Do You Have What it Takes to Be an Accredited Investor If the Rules Loosen?

    The definition of accredited investor may expand if the Senate backs the House and approves the Fair Investment Opportunities for Professional Experts Act.
  7. Term

    Choosing a Stockbroker Over a Discount Broker

    A stockbroker executes buy and sell orders submitted by investors.
  8. Bonds & Fixed Income

    Bond Buyers: Is Your Broker Overcharging You?

    Retail investors are at a disadvantage when it comes to buying bonds, because brokers don't have to disclose everything. That’s expected to change soon.
  9. Investing Basics

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  10. Your Practice

    How Do Edward Jones and Merrill Lynch Compare?

    Merrill Lynch and Edward Jones have both been around for decades, but they approach business very differently. Here's the lowdown on how they compare.
RELATED FAQS
  1. What types of accounts are available for forex trading?

    There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex ... Read Answer >>
  2. How long does a stock account have to be dormant before it can be escheated?

    Learn what qualifies a stock account to be considered abandoned and eligible to be escheated by the state. Accounts are at ... Read Answer >>
  3. What is the interest rate offered on a typical margin account?

    Learn about the basics of trading on margin accounts, specifically the rate of interest that is typically charged for margin ... Read Answer >>
  4. What is the cost of a share purchase?

    Find out how the total price of a share purchase is dictated by the current stock price and the fees the brokerage company ... Read Answer >>
  5. What is the difference between fee-based advisors and commission-based advisors?

    Understand the difference between fee-based advisers and commission-based advisers. Learn what types of duties each type ... Read Answer >>
  6. What is the difference between a custodian bank and a mutual fund custodian?

    Read about the difference between a normal custodian bank and a mutual fund custodian, why mutual funds use custodians and ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center