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An investor who makes many trades throughout a trading day, buying and selling securities in order to profit from short-term changes in prices. For example, a trader may buy Stock A at $15 per share because he/she believes it will be $18 a few minutes, or hours, later. Traders engage in high risk activities because there is no guarantee that the price will move in the desired direction. However, traders provide a great deal of liquidity to the market. See also: Registered Competitive Trader.


A person who buys and sells securities with the goal of profiting from short-term price swings.


Traders who are dealers or market makers select the securities in which they will specialize and provide quotes on those securities in the marketplace.

They commit their firm's capital by taking positions in those securities and are ready to buy and sell at the prices they quote.

Traders known as competitive or floor traders buy and sell securities for their own accounts. They don't pay commissions, so they can profit on small differences in price, but they must abide by the rules established by the exchange or market on which they trade.

The term trader also describes people who execute transactions at brokerage firms, asset management firms, and mutual fund companies.