Trader

What is a trader?

In financial markets, a trader is someone who buys and sells instruments including shares, bonds, commodities and currencies. The role is similar to that of broker but traders are usually acting on their own behalf while brokers are acting for their clients.

Where have you heard about traders?

Traders are the most visible human symbol of the financial markets, particularly those working on the diminishing number of face-to-face trading floors. No news report of market turbulence is complete without pictures of traders either gesticulating wildly or staring in horror at computer screens.

What you need to know about traders...

The role of the trader differs from one market to another and from country to country. But in general they 'make a market' in whatever asset they deal in, meaning they will quote buying and selling prices and will carry an inventory of the asset in question on their own books. This provides liquidity. Critics say financial traders cause volatility because without it they will not be able to turn a profit on their dealings. Defenders retort that by being willing to make a market, traders bring stability to the financial system.