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Day Trade |
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Day trade Also known as a "daylight trade." The purchase and sale or the short sale and cover of the same security in a margin account on the same day. Day Trade An investment practice in which one buys (or sells short) a security and then sells (or buys) the same security in the same trading day. That is, a day trade involves the opening and the closing of a position on the same trading day, in order to profit from short-term changes in price. For example, a day trader may buy Stock A at $15 per share because he/she believes it will be $17 a few minutes or hours later. The activities in which day traders engage are high risk because there is no guarantee that the price will move in the desired direction. However, day traders provide a great deal of liquidity to the market.
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