What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community. Get Started Now!


Day trading

Day trading is the practice of quickly and frequently buying and selling stocks in the belief that the investor can capture substantial value through the short-term changes in the stock price.

Contents

Expanded Definition

Day trading refers to the practice of buying and selling the same stock within the same trading day. Investors practicing day trading believe they can create substantial returns by capitalizing on the natural volatility of the market. However, the increased trading costs often wipe out accrued gains, and the resulting gains are subject to the higher short-term capital gains tax instead of the lower long-term capital gains tax.

Related Fool Articles

Related Terms

Recent Mentions on Fool.com

Advertisement