One who...trades. Duh. Like Vic. Or Joe.
But...what does this even mean? If we own stocks (and 2/3 of the country does, in one form or another), then aren't we all traders? Well, kinda sorta. But there exist a few key delineations.
Trading implies a lot of movement (when you trade stocks or goods, in fact, you're doing it daily-ish, whereas when you invest, you're buying a given security and holding it for years, if not decades). So what then does a trader...do? Well, in the professional trenches, a typical trader runs a "book," or investment portfolio, which takes advantage of inefficiently priced stocks, bonds, and derivatives therein. They trade; they don't invest. The moment their cash is deployed, they're already thinking about how to turn that trade into more cash than they invested. Like...tomorrow. Or next week. Or next month.
Vast difference from an investor who pays 10% of an early-stage tech company and says, "Call me next decade after you've been public a few years; maybe then I'll think about selling."
Related or Semi-related Video
Finance: What is Principal Trade?0 Views
Finance Allah Shmoop What is ah principal trade All right
People think the broker as money manager or invest or
for their own account rather than just commission taker That
is a principle trade happens when the principal in the
trade by cell shorts leverage longs and well any other
kind of investment exposures such that they make or lose
money for their own account using their own money I'ii
they are the principles in that trade Well the extra
spiff to the brokerage in making trading happen on their
own is that the scum sucking leeches they normally be
paying commissions to on those trades are in fact yes
themselves I either just trading for themselves and yeah thumbs
up there pal Well when making this kind of trade
brokers must report it I make it known to their
trading partners or whoever they're trading with and then file
paperwork behind it The thinking being that a brokerage should
presumably have a lot more knowledge than the average schmo
Yeah this guy when they're making these trades and they
have to be highly disc close it tive that they're
actually buying or selling a given stock for their own
account when maybe they've got some stockbroker who's doing the
opposite for some unwitting client The SEC wants to know
about it If there's any you no funny business going 00:01:22.14 --> [endTime] on they're there to protect the little guy
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