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Trading


Definition

Trading is the act of buying and selling securities on behalf of the client (or the trader themselves). The reasons to trade vary, but most often are motivated by an interest in either making a profit, or hedging a position.

Using the term Trading :

Chris Badminton is a trader that hedges commodity exposure for a large industrial company. He also seeks profit by making directional trades in the direction of the overall market.

Pay Special Attention To :

Trading too frequently often leads to losses over the long term. It is possible to beat the market occasionally through frequent trading, but except for certain professionals with specialized training and skill, frequent trading normally leads to losses due to the high costs in both short term tax gains (taxed at the highest marginal rate) and the commissions cost.

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Related terms

Algorithmic Trading , Calendar Rebalancing

'Trading' appears in these other terms:

Algorithmic Trading Insider Trading Trading Places 

'Trading' appears in the definitions of these other terms:

Adverse Selection Risk Algorithmic Trading Earnings Momentum Insider Trading Pairs Trade Trading Places