day trader

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Day Trader

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 day trader may buy Stock A at $15 per share because he/she believes it will be $25 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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

day trader

A speculator who buys and sells securities on the basis of small short-term price movements. Day traders are thought to add a measure of liquidity to the market.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Day trader.

When you continuously buy and sell investments within a very short time, perhaps a few minutes or hours, and rarely hold them overnight, you're considered a day trader.

The strategy is to take advantage of rapid price changes to make money quickly.

The risk is that as a day trader you can lose substantial amounts of money since no one can predict how or when prices will change. That risk is compounded by the fact that technology does not always keep pace with investors' orders, so if you authorize a sell at one price, the price it's actually executed at may be higher or lower, wiping out potential profit.

In addition, you pay transaction costs on each buy and sell order. Your gains must be large enough to offset those costs if you're going to come out ahead.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
[25] Daytrader, "Bollinger bands as an entry technique," 2000.
They are daytraders in the sense that they spend their days trading, but they evaluate companies according to the usual criteria and buy and sell through brokers, whether real or online.
Daytraders have access to the same information as professional brokers.
Failed daytrader Mark Barton lost more than pounds 50,000 before killing his wife and two children.
And, he avoids the infamous daytrader chat rooms that have flooded the Internet the past couple of years.
"Fear and Greed in Financial Markets: A Clinical Study of DayTraders." American Economic Review: Papers and Proceedings.
"Daytraders who were expecting a good positive move could see that there wasn't a great deal of momentum and they just cut their positions towards the end of the session," Bruce said.
Recently, Newsweek noted that the past decade was crazed by "everyone from daytraders to CEOs look[ing] for shortcuts to wealth." In the last three years.
More labor will be available as daytraders crash and burn and start looking for jobs.
Meanwhile, the very real possibility of a more immediate and sharp market correction looms darkly over Wall Street, threatening the revenues of any firm that caters to hapless daytraders, who are likely to bow our as the unprecedented bull market turns sour.
This increase in buying and selling by daytraders and on-line traders has led to an increase in the number of "wash sales" our firm has seen in recent history.
It's savvy individual investors, particularly those who believe in a company's mission and its product, who ought to be its primary initial investors - not faceless institutions, many of whom, truth be told, flip stock as shamelessly as the most fickle of daytraders. "[Institutions] essentially use a privileged position to generate a gain that I wouldn't be moralistic enough to say they have no right to, but they really added no value to," says David Schehr, senior research analyst, Gartner Group financial services.