Competitive Trader

competitive trader

See floor trader.

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Competitive Trader

On an exchange floor, a member who trades predominantly or exclusively on his/her own account. That is, the member does not represent a particular firm or client. A competitive trader tends to profit from short-term price changes; they provide approximately 75% of liquidity in the market on a trading day. They contrast with floor brokers, who fill orders on behalf of clients. A competitive trader is also called a floor trader.

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Competitive trader. Competitive traders, also known as registered competitive traders or floor traders, buy and sell stocks for their own accounts on the floor of an exchange.

Traders must follow very specific rules governing when they can buy and sell. But since they trade in large volumes and do not pay commissions on their transactions, they can profit from small differences between the prices at which they buy and sell.