Trader (finance)
{{Short description|Person who trades stocks}}
{{Financial markets}}
A trader is a person, firm, or entity in finance who buys and sells financial instruments, such as forex, cryptocurrencies, stocks, bonds, commodities, derivatives, and mutual funds, indices in the capacity of agent, hedger, arbitrager, or speculator.{{Cite web|title=Trader definition|url=https://www.investopedia.com/terms/t/trader.asp|url-status=live|archive-url=https://web.archive.org/web/20230628230939/https://www.investopedia.com/terms/t/trader.asp|archive-date=Jun 28, 2023}}
Duties and types
The word "trader" appeared as early as 1863 in a universal dictionary as "trading man."[https://books.google.com/books?id=4fZpEs-EY7sC&dq=Trader+lexikon&pg=PA740 Verlagsbuchhandlung Pierer (Hrsg.), Pierer's Universal Lexikon der Vergangenheit und Gegenwart, Band 17, 1863, S. 740] Traders work for financial institutions as foreign exchange or securities dealers in the cash market and in the futures market, or for their own account as proprietary traders.[https://books.google.com/books?id=KwWBBwAAQBAJ&dq=Trader+lexikon&pg=PA613 Ulrich Becker, Lexikon Terminhandel: Finanz- und Rohstoff-Futures, 1994, S. 612 f.] They also include stock exchange traders, but not stockbrokers or lead brokers.
Traders buy and sell financial instruments traded in the stock markets, derivatives markets and commodity markets, comprising the stock exchanges, derivatives exchanges, and the commodities exchanges. Several categories and designations for diverse kinds of traders are found in finance, including:
- Bond trader.
- Floor trader.
- Hedge fund trader.
- High-frequency trader.
- Market maker.
- Pattern day trader.
- Principal trader.
- Proprietary trader.
- Rogue trader.
- Scalper.
- Stock trader.
Income
File:NY stock exchange traders floor LC-U9-10548-6.jpg
According to The Wall Street Journal in 2004, a managing director convertible bond trader was earning between $700,000 and $900,000 on average.[http://online.wsj.com/article/SB113141870174290857.html Street's Weather: Bonus Showers - WSJ.com]
See also
- Commodities exchange
- Commodity market
- Derivatives market
- {{slink|Financial risk management#Investment management}}
- List of commodity traders
- List of trading losses
- Mismarking
- Stock exchange
- Stock market
- Trading strategy
References
{{Reflist}}
External links
- {{wikibooks inline|Trading}}