Speculation in financial securities is referred as day trading. This concept is usually referred to when trading of financial instruments such as their buying and selling takes place in a single trading day. In a simple manner, day trading is trading of financial securities or instruments within a single trading day.
It is done in such a way that all related positions should be closed before the market or related stock exchange closes that particular trading day. However, not every trader is strict enough to follow this strategy or concept with pin point accuracy. Still, there are a significant numbers of traders involved in stock trading who follow or implement concept of day trading in their operation as their overall strategy. Their rule is simple, nothing works? Let’s apply day trading.
Such traders, taking part in day trading are referred as Day Traders. There are some traders who take part in day trading and trade-in such capacity with aim of getting out some profit through it are referred as speculators. In day trading main activity is to trade various financial instruments. Following are some most common financial instruments traded in day trading.
They are also referred as Day traded financial instruments:
Stocks
Options
Currencies
Host of future contracts
Equity index futures
Interest rate futures
Currency futures
Commodity futures
Back into the time, day trading was nearly exclusive activity mostly done by well established financial firms and professional speculators as well. Most of the day traders are employees of various banks or investment firms. These employees are assigned as specialists for managing funds and equity investment. Nowadays, it is not an exclusive activity that is performed by limited parties as done in the past. Technologies such as electronic trading and concept of margin trading have encouraged this activity to become more common and it can / is done by almost any common trader nowadays.
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