Trading Dollars

Dictionary Says

Definition of 'Trading Dollars'


A slang term describing a company that is spending just as much money as it is making on a product that it develops. Trading dollars refers to a breakeven business investment. The company essential trades its expenses for an equal amount of return, thus the name "trading dollars," or "trading dollars for dollars."

Investopedia Says

Investopedia explains 'Trading Dollars'


Since businesses are interested in generating profits, trading dollars is a situation that typically describes a waste of effort and resources. While the venture did not lose money, the capital could have been allocated to a profitable venture. In this sense, any event that results in trading dollars can be viewed as a loss rather than just a break-even event.

For example, a gold exploration company that spends $10 million to mine $10 million worth of gold can be said to be trading dollars. Likewise, an oil company that invests $5 million to extract only $5 million worth of oil is trading dollars. These business ventures are zero-sum games, where the business's gains are exactly balanced by its losses (or expenses) in product development or in a particular business investment.

comments powered by Disqus
Hot Definitions
  1. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  2. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
  3. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  4. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  5. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  6. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
Trading Center