day trader

(redirected from Daytraders)
Also found in: Dictionary.

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.

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.

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.

References in periodicals archive ?
Daytraders have access to the same information as professional brokers.
Daytraders try to capitalise on price shifts of a few pennies but in sufficiently high volumes so that each trade can be profitable.
A volatile market, with fast-moving prices, gives the daytrader the best chance to make a profit.
Daytraders thrive on volatility, and the difference between profit and loss can be a moment of hesitation during active periods of a stock's trading.
True daytraders will more often than not get in and out of the very same equity during one market session.
Daytraders will not normally hold on to an equity or group of equities until the next day.
Daytraders will normally make many trades in the very same security or group of securities in a single trading day.
Daytraders will not normally keep their stocks overnight until the next day.
Disciplined daytraders should not consistently have stocks until the next morning.
Common daytraders could keep stocks a short number of days or weeks.
True daytraders will quite often buy and sell the very same security or group of securities during one market day.
A daytrader will not typically own his or her stocks until the next morning.