Individuals who take positions in securities and their derivatives with the objective of making profits. Traders can make markets by trading the flow. When they do this, their objective is to earn the bid/ask spread. Traders can also take proprietary positions in which they seek to profit from the directional movement of prices or spread positions.

Investing Essentials

Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day


In the context of finance, refers to compensation of dealers by sales finance companies for discounting installment purchase paper. In the context of contracts, refers to secret payments made to... Read More

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!

Create your free portfolio