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Directional Trade




A trade that requires the underlying asset to move in one direction in order to produce profits.

To make a profit, the trader must determine before placing a directional trade which way the asset will go.


Additional Comments:

Buying stocks is an example of a directional bet because the stock price must move higher in order to generate profits.

Related Terms:

Speculator
An investor or trader who is willing to take large risks for a chance to make ...

Straddle
A neutral trade that involves simultaneously buying a call and put at the same strike price ...

Stop Order
A stop order is an order to buy or sell a stock once the price of ...





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