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A trader is a person, firm, or entity in
According to ''Street's Weather: Bonus Showers - WSJ.com
/ref>
finance
Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
who buys and sells financial instruments
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership, interest in an entity or a contractual right to receive or deliver in the form ...
, such as forex
The foreign exchange market (forex, FX, or currency market) is a global decentralization, decentralized or Over-the-counter (finance), over-the-counter (OTC) Market (economics), market for the trading of currency, currencies. This market det ...
, cryptocurrencies
A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Individual coin ownership records ...
, stock
Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...
s, bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Fidelity bond, a type of insurance policy for employers
* Chemical bond, t ...
s, commodities
In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.
Th ...
, derivatives, and mutual funds
A mutual fund is an investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in Europe ('investmen ...
, indices in the capacity of agent, hedger, arbitrage
Arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more marketsstriking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which th ...
r, or speculator.
Duties and types
The word "trader" appeared as early as 1863 in a universal dictionary as "trading man." Traders work for financial institutions as foreign exchange or securities dealers in the cash market and in the futures market, or for their own account as proprietary traders. They also include stock exchange traders, but not stockbrokers or lead brokers. Traders buy and sell financial instruments traded in thestock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange a ...
s, derivatives market
The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets.
The market can be divided into two, that for exchange-traded derivatives a ...
s and commodity markets
A commodity market is a market that trades in the primary economic sector rather than manufactured products. The primary sector includes agricultural products, energy products, and metals. Soft commodities may be perishable and harvested, w ...
, comprising the stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...
s, derivatives exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or ...
s, and the commodities exchange
A commodities exchange is an exchange, or market, where various commodities are traded. Most commodity markets around the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, ...
s. Several categories and designations for diverse kinds of traders are found in finance
Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
, including:
*Bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Fidelity bond, a type of insurance policy for employers
* Chemical bond, t ...
trader.
*Floor trader
A floor trader is a member of a stock or commodities exchange who trades on the floor of that exchange for their own account. The floor trader must abide by trading rules similar to those of the exchange specialists who trade on behalf of others. ...
.
*Hedge fund
A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...
trader.
* High-frequency trader.
*Market maker
A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the difference, which is called the ''bid–ask spread'' or ''turn.'' Thi ...
.
*Pattern day trader
In the United States, a pattern day trader is a Financial Industry Regulatory Authority (FINRA) designation for a stock trader who executes four or more day trades in five business days in a margin account, provided the number of day trades a ...
.
*Principal trade A principal trade occurs when a brokerage house buys securities on the secondary market with the express strategy to hold long enough for a price appreciation. At that point the broker sells retails to the end use and gains appreciation plus commi ...
r.
* Proprietary trader.
*Rogue trader
In financial trading, a rogue trader is an employee authorized to make trades on behalf of their employer (subject to certain conditions) who makes unauthorized trades. It can also involve mismarking of securities. The perpetrator is a legitimat ...
.
*Scalper
Ticket resale (also known as ticket scalping or ticket touting when done for profit) is the act of reselling ticket (admission), tickets for admission to events. Tickets are bought from licensed sellers and then sold for a price determined by the i ...
.
*Stock trader
A stock trader or equity trader or share trader, also called a stock investor, is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an inve ...
.
Income
According to ''The Wall Street Journal
''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...
'' in 2004, a managing director
A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization.
CEOs find roles in variou ...
convertible bond
In finance, a convertible bond, convertible note, or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in ...
trader was earning between $700,000 and $900,000 on average./ref>
See also
*Commodities exchange
A commodities exchange is an exchange, or market, where various commodities are traded. Most commodity markets around the world trade in agricultural products and other raw materials (like wheat, barley, sugar, maize, cotton, cocoa, coffee, ...
*Commodity market
A commodity market is a market that trades in the primary economic sector rather than manufactured products. The primary sector includes agricultural products, energy products, and metals. Soft commodities may be perishable and harvested, w ...
*Derivatives market
The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets.
The market can be divided into two, that for exchange-traded derivatives a ...
*
* List of commodity traders
*List of trading losses
The following contains a list of trading losses of the equivalent of US$100 million or higher. Trading losses are the amount of principal losses in an account. Because of the secretive nature of many hedge funds and fund managers, some notable loss ...
*Mismarking
Mismarking in securities valuation takes place when the value that is assigned to securities does not reflect what the securities are actually worth, due to intentional fraudulent mispricing. Mismarking misleads investors and fund executives about ...
*Stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...
*Stock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange a ...
*Trading strategy
In finance, a trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets.
The difference between short trading and long-term investing is in the opposite approach and principles. Going shor ...
References
External links
* Financial services occupations Stock market Commodity markets Financial markets no:Trader