What is 'Full Trading Authorization'

Full trading authorization is a level of trading authorization that grants an agent or broker the power to place orders, withdraw funds or make inquiries concerning a client's account. Written documentation must be completed by the client before an agent or broker can be given power of attorney over the client's account.

BREAKING DOWN 'Full Trading Authorization'

Trading authorization is often discussed when an investor enlists the services of a new broker or agent for the first time. At this point, the specific level of authorization the investor desires will be established and formally agreed upon.

Full trading authorization allows brokers to buy or sell securities on behalf of their clients, look into account activity or overall balances and extract funds for disbursement. In essence, an agent with full trading authorization is empowered with the authority to conduct all of the activities that the client themselves would be able to perform.

This level of authorization is often used by investors who may not have sufficient knowledge to engage in trading, or who lack the confidence to make major trading decisions on their own. It may also be preferred by investors who are busy and find the process of researching and monitoring trading activity to be too stressful or time-consuming.

Full Trading Authorization Considerations

Investors who approve full trading authorization must have the utmost confidence and trust in their agent or broker. This would likely only be a preferred option for investors who are not only trusting of their agent, but who also are comfortable relinquishing a significant amount of control over their own financial accounts and activities.

Investors who do not want to allow a broker to transfer funds from their accounts may consider limited trading authorization. This limits the broker's approved actions to purchasing and selling securities or account inquiries, and restricts them from accessing funds. The basic goal of granting an agent limited trading authorization is to allow them to initiate and perform transactions that will, ideally, be profitable for their clients. This is a good option for investors who do not want or need their agent to seek approval for each and every trading move, but who do not want to share full control over every aspect of their account and financial activity. This provides the agent with greater flexibility, and the ability to react quickly to market changes while still giving the investor some peace of mind, since they have not relinquished complete control of their accounts.

  1. Trading Authorization

    Trading authorization refers to the level of power entrusted ...
  2. Agency Broker

    An agency broker is a broker that acts as an agent to its clients. ...
  3. Captive Agent

    A captive agent is an insurance agent who only works for one ...
  4. Paying Agent

    A paying agent is an agent who accepts payments from the issuer ...
  5. Open Listing

    An open listing is a property listing that uses multiple real ...
  6. Broker

    1. An individual or firm that charges a fee or commission for ...
Related Articles
  1. Investing

    Would You Make A Good Real Estate Broker?

    How to tell if you'd be good in this field. It is a common second career for many people, but isn't a good match for everyone.
  2. Investing

    How to Choose the Right Real Estate Broker

    Buying or selling a home can be the major financial transaction of your life. Here's how to choose the right real estate broker or agent.
  3. Financial Advisor

    How to Find the Best Life Insurance Agent

    Choosing a life insurance agent is the first and most important step in obtaining coverage. Buyers should pay attention to five key factors.
  4. Investing

    A Broker's Open House Can Help You Sell Your Home

    This special type of open house can provide targeted marketing and yield expert advice.
  5. Managing Wealth

    Medical Power of Attorney: Which Child to Choose?

    Don’t compromise for the sake of family harmony when you pick an adult child to fill this role. But be sure you fully explain your decision to all.
  6. Insurance

    What Your Life Insurance Agent Makes – On You

    Being paid by commission gives life insurance agents an incentive to sell bigger policies and specialized financial products. Remember that before you buy.
  7. Investing

    The Lowdown On Low-Fee Real Estate Agents

    Find out how the services of low-commission real estate agents comapare to full-service realtors.
  8. Taxes

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  9. Trading

    Is your forex broker a scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  1. How are real estate agents, brokers, and realtors different?

    Agents, brokers and realtors are often considered the same. In reality, these real estate positions have different responsibilities ... Read Answer >>
  2. Do real estate agents work on weekends?

    Learn how working weekends and evenings is one way real estate agents increase their chances of making a sale to a potential ... Read Answer >>
  3. If everyone is selling in a bear market, does your broker have to buy your shares ...

    Learn about who the counterparty to your trades is, and how your broker functions during a market sell off. Read Answer >>
Trading Center