Trading securities are securities bought and held primarily for sale in the near term to generate income on short-term price differences.

Question

Quizplus · Accepted Answer

Trading securities are bought and held primarily for the purpose of selling them in the near term to generate income on short-term price differences. Examples of trading securities include stocks, bonds, and derivatives. In contrast, securities that are bought and held for a longer period of time with the goal of generating income from dividends, interest, or appreciation are considered held-to-maturity or available-for-sale securities.

Trading Securities Are Securities Bought and Held Primarily for Sale