Trading, explained

Trading is not investing, and it is not gambling. Here is what it really means to trade.

What is Trading?Lesson 1 of 8

All lessons

By the end of this lesson you'll be able to:

01Define trading in plain terms
02Explain how trading differs from investing
03Identify what actually creates a profit or loss

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

Trading and Financial Markets: The Complete Foundation Guide

Key terms

Trading Position Spread

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

Question 01
Which statement best describes trading?
Question 02
What is the main difference between a trader and an investor?
Question 03
What does it mean to 'go short'?
Question 04
A trader can make a profit when prices do what?
Question 05
You go long (buy) a stock at 100. You would lose money if you later sold at what price?
Question 06
You buy at 100 and sell at 105 with a position of 10 units. Before costs, your profit is:
Question 07
You expect a stock to fall. To profit from that view, what would you do?
Question 08
A friend plans to buy a fund and hold it for 20 years for retirement. This is closest to which activity?
Question 09
What separates trading from gambling?
Question 10
Which of these is NOT part of a sound trading process?

Answered 0 of 10 · pass 70% (7/10) to complete

What is Trading?1 of 8

Trading, explained

Trading is not investing, and it is not gambling. Here is what it really means to trade.

What is Trading?Lesson 1 of 8

All lessons

By the end of this lesson you'll be able to:

01Define trading in plain terms
02Explain how trading differs from investing
03Identify what actually creates a profit or loss

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

Trading and Financial Markets: The Complete Foundation Guide

Key terms

Trading Position Spread

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

Question 01
Which statement best describes trading?
Question 02
What is the main difference between a trader and an investor?
Question 03
What does it mean to 'go short'?
Question 04
A trader can make a profit when prices do what?
Question 05
You go long (buy) a stock at 100. You would lose money if you later sold at what price?
Question 06
You buy at 100 and sell at 105 with a position of 10 units. Before costs, your profit is:
Question 07
You expect a stock to fall. To profit from that view, what would you do?
Question 08
A friend plans to buy a fund and hold it for 20 years for retirement. This is closest to which activity?
Question 09
What separates trading from gambling?
Question 10
Which of these is NOT part of a sound trading process?

Answered 0 of 10 · pass 70% (7/10) to complete

What is Trading?1 of 8

Trading, explained

By the end of this lesson you'll be able to:

Read the guide first

Quick check

Which statement best describes trading?

What is the main difference between a trader and an investor?

What does it mean to 'go short'?

A trader can make a profit when prices do what?

You go long (buy) a stock at 100. You would lose money if you later sold at what price?

You buy at 100 and sell at 105 with a position of 10 units. Before costs, your profit is:

You expect a stock to fall. To profit from that view, what would you do?

A friend plans to buy a fund and hold it for 20 years for retirement. This is closest to which activity?

What separates trading from gambling?

Which of these is NOT part of a sound trading process?

Trading, explained

By the end of this lesson you'll be able to:

Read the guide first

Quick check

Which statement best describes trading?

What is the main difference between a trader and an investor?

What does it mean to 'go short'?

A trader can make a profit when prices do what?

You go long (buy) a stock at 100. You would lose money if you later sold at what price?

You buy at 100 and sell at 105 with a position of 10 units. Before costs, your profit is:

You expect a stock to fall. To profit from that view, what would you do?

A friend plans to buy a fund and hold it for 20 years for retirement. This is closest to which activity?

What separates trading from gambling?

Which of these is NOT part of a sound trading process?