The trading account is opened with a bank or other financial institution and is usually managed by an investment dealer. Traditionally, stocks are the most common financial instrument held in a trading account, but cash, including foreign face values, and other financial instruments such as bonds, options, commodities, futures and derivatives may also be held.

Trading is the frequent buying and selling of financial instruments with the goal of generating returns that outperform the buy-and-hold strategy that is widely used in investing. Trading profits are usually made by buying at a low price and selling at a higher price over a short period of time. Trading profits can also be made by selling at a high price and buying at a lower price to cover the position. This is called a "short selling" strategy, which is executed in a falling market.

Trading Account Features
Both individuals and companies can open trading accounts and deposit a certain amount of money to conduct trading operations. The minimum deposit amount is usually set by the financial institution and sometimes even by state law.

While trading accounts are typically considered for shorter-term transactions than investment accounts with a broker, there is no specific rule setting the boundary between them. The period during which an open position is held in a trading account is based on a strategy implemented by the trader. A position trader can hold an open position for months to several years. Swing traders typically hold their positions open for days to several weeks, while day and scalp traders do not hold their positions overnight.

Before opening a trading account, it would be useful to familiarize yourself with the different types of trading accounts and other options available. The easiest way to open a trading account is to visit an online brokerage website. There you will find all the information about the services offered including trading accounts. Two main types are cash or margin accounts. You can also click here to open a trading account now!