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A day trader is a stock trader who holds positions for a very short time (from minutes to hours) and makes many trades each day. They buy and sell stocks rapidly hoping the stocks will climb or fall in value for the seconds or minutes they own the stock, enabling them to lock in quick profits. Most trades are entered and closed out within the same day.
Day traders are speculators rather than hedgers. The Securities and Exchange Commission warns that day trading "is extremely risky and can result in substantial financial losses in a very short period of time."
- ↑ Day Trading. Securities and Exchange Commission.
- ↑ Day Trader. Investopedia.