Legal Definitions - trader

A trader is a person who buys and sells goods or securities for profit. The term can have different meanings depending on the context:

A trader can be someone who buys goods from a supplier and sells them to customers at a higher price to make a profit. For example, a clothing store owner is a trader.

A trader can also be someone who buys and sells commodities, such as oil, gold, or wheat, in anticipation of making a profit. This type of trader may work for a company or trade on their own account.

A trader can also be someone who buys and sells stocks, bonds, or other securities on a stock exchange. This type of trader may work for a brokerage firm or trade on their own account.

In U.S. income tax law, a trader is someone who deals in property as a business, making several purchases and sales within a year. This is different from someone who sells assets held for investment. A trader may lose the right to defer capital gains by exchanging for another property.

Examples:

• A farmer who sells crops at a local market is a trader.
• A hedge fund manager who buys and sells stocks for clients is a trader.
• A day trader who buys and sells stocks within a single trading day is a trader.

These examples illustrate how a trader can work in different industries and contexts, but they all share the goal of making a profit through buying and selling assets.