Trade (finance)

In finance, a trade is an exchange of a security (stocks, bonds, commodities, currencies, derivatives or any valuable financial instrument) for "cash", typically a short-dated promise to pay in the currency of the country where the 'exchange' is located. The price at which a financial instrument is traded, is determined by the supply and demand for that financial instrument.


 * Securities trade life cycle
 * 1) Order initiation and execution. (Front office function)
 * 2) Risk management and order routing. (Middle office function)
 * 3) Order matching and conversion into trade. (Front office function)
 * 4) Affirmation and confirmation. (back office function)
 * 5) Clearing and Settlement. (back office function)