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 a Floor Broker v. Floor...13 Views
Finance allah shmoop What is ah floor broker versus a
floor trader All right Well here's a floor fixer and
here's a floor broker but okay Shocking a floor broker
Brokers stocks on the floor of a stock exchange Right
Well here's the new york stock exchange here's its floor
These guys down here they're floor brokers That is they're
trading stocks and other securities on behalf of their clients
Basically this is the scene from trading places with eddie
murphy Great old film Old rich white guys in a
building up here Call down to their guys on the
floor who execute their bidding All right well it's a
bunch of brokers all trading their clients stocks right here
and here And here and here and here all over
the world within among each other So that money is
well pushed around thoroughly like that Cato's in grandma's hash
browns recipe Note that a floor broker is different from
a floor trader Who although he or she works on
the floor of an exchange also makes trades as a
principal for his or her own account So yeah that's
floor broker No jackhammer required Thank you very much Go
Up Next
What is Acting as a Principal? Acting as a principal happens when an individual or company takes on the role of principal. Usually in the case of c...
What is Principal Trade? Principal trade is a trade a firm makes for its own house account and inventory, using its own funds. This differentiates...