Directional Trade
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| 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. |
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Additional Comments:
Buying stocks is an example of a directional bet because the stock price must move higher in order to generate profits.
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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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