Trading Account

AAA

DEFINITION of 'Trading Account'

1. 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    A balance in an account that is able to be withdrawn or used ...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. Cash Account

    A regular brokerage account in which the customer is required ...
  6. Account

    1. An arrangement by which an organization accepts a customer's ...
Related Articles
  1. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  2. 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.
  3. Options & Futures

    Margin Trading

    Find out what margin is, how margin calls work, the advantages of leverage and why using margin can be risky.
  4. Investing Basics

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  5. Brokers

    Broker-Dealer Industry 101: The Landscape

    Independent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
  6. Brokers

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  7. Term

    What is Financial Technology?

    Financial technology, or fintech, is a financial services sector that emerged in the 21st century.
  8. Investing Basics

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  9. Investing Basics

    Is Your Broker Churning Your Account?

    Is your broker churning your account to generate fees? Here's how to know and what recourse you have.
  10. Investing Basics

    Shareholders: Vote Your Proxy and Be Heard

    Voting shares, in person or via proxy ballot, is a right every shareholder should exercise. Here's why.
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 Full Answer >>
  2. What is the interest rate offered on a typical margin account?

    Interest rates on margin accounts vary according to the size of the loan and the brokerage firm being used. Generally, interest ... Read Full Answer >>
  3. What is the cost of a share purchase?

    When investors purchase shares of stock, the price paid includes two components: the price of the stock and the fee charged ... Read Full Answer >>
  4. What is the difference between fee-based advisors and commission-based advisors?

    The difference between a fee-based adviser and a commission-based adviser is that the former collects a flat fee for investment ... Read Full Answer >>
  5. What is the difference between a custodian bank and a mutual fund custodian?

    Custodian banks and mutual fund custodians, commonly known as mutual fund corporations, perform very similar roles for different ... Read Full Answer >>
  6. How does an insurance broker make money?

    An insurance broker makes money off commissions from selling insurance to individuals or businesses. Most commissions are ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both ...
  2. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  3. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  4. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  5. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  6. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!