Accounting Dictionary

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Trading Securities

Definition: Trading securities is a category of securities that includes both debt and equity securities, and which an entity intends to sell in the short term for a profit that it expects to generate from changes in the price of the securities. Trading is usually done through an organized stock exchange, which acts as the intermediary between a buyer and seller, though it is also possible to directly engage in purchase and sale transactions with counterparties.

Trading securities are recorded in the balance sheet at their fair value. This type of marketable security is always positioned in the balance sheet as a current asset.

Other types of marketable securities are available-for-sale and held-to-maturity.