Trader

Someone who buys and sells based on expected near-term price movement, not on the underlying asset changing in value.

Example

Buying a stock this morning because its price is rising, planning to sell by Friday.

Important

Trading and investing are different skills with different odds, neither inherently better - the trouble starts when someone invests with a trader's holding period, or trades with an investor's conviction.

Related terms

• Investor — Someone who buys an asset expecting to hold it long enough for the underlying business or asset to create value.
• Speculation — Putting money at risk on an outcome you cannot analyse with any real confidence, hoping for a large payoff.
• Holding period — How long you keep an asset before selling it.

Lessons that explain it

• Investor versus trader — The words get used interchangeably, but they describe different time horizons, different skills, and very different odds. (10 min)

All 578 terms in the Investing glossary