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.

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 ?
Unlike the day trader and the swing trader, who base their trades on chart movements, the position trader makes his trading decisions by analysing fundamental events in the markets such as policy changes, governmental decisions, interest rates, and unemployment data, among others.
Businesses usually do not interact with the day trader directly, but other investors will see the changing values as indices change.
The company has built custom trading computers for forex traders, stock traders, futures traders, day traders, private equity funds, as well as hedge funds.
This week gave day traders and the more conservative investors plenty of opportunities to buy and offload.
Of course, just because you buy and sell stocks online doesn't make you a professional day trader.
Under existing case law, the typical day trader should be considered a trader or an investor and, thus, should receive capital gain or loss treatment on securities transactions.
Second, a day trader can classify his or her activities as a business to be reported under schedule C of form 1040.
A day trader is an individual who buys and sells securities all day for a living.
One day trader called and said, 'Hello, I just bought your stock and by the way, what do you do?