What is 'Trade'?

A basic economic concept that involves multiple parties participating in the voluntary negotiation. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Trade Trade is a basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties. Trade can take place within an economy between producers and consumers. International trade allows countries to expand markets for both goods and services that otherwise may not have been available to it. It is the reason why an American consumer can pick between a Japanese, German, or American car. As a result of international trade, the market contains greater competition and therefore, more competitive prices, which brings a cheaper product home to the consumer. In financial markets, trading refers to the buying and selling of securities, such as the purchase of stock on the floor of the New York Stock Exchange (NYSE). Read More » HOW INTERNATIONAL TRADE WORKS The Investor's Guide to Global Trade What happens when the world's leading economies interact? Explore The Guide ➥ Related to "Trade" The Basics of Tariffs And Trade Barriers Everything you need to know about trade barriers and tariffs, why they are used and their effects on the local economy. Read More » Absolute vs. Comparative Advantage: What's the Difference? Absolute advantage is when a company requires fewer resources to produce, while comparative advantage takes into account the opportunity cost of a strategy. Read More » What Is the World Trade Organization? The World Trade Organization (WTO) sets the global rules of trade. But what exactly does it do and why do so many oppose it? Read More » Related Definitions Trade Deficit A trade deficit occurs when a country's imports exceed its exports. It is an economic measure used in the field of international trade. A trade deficit is not necessarily detrimental, because it often corrects itself over time. However, a trade deficit may lead to fewer jobs. Read More » Foreign Direct Investment (FDI) Foreign direct investment (FDI) is an investment made by a company or entity based in one country into a company or entity based in another country. Read More » Opportunity Cost Opportunity cost is the benefit that is missed or given up when an investor, individual or business chooses one alternative over another. Read More » David Ricardo David Ricardo was a classical economist best known for his theory on wages and profit, labor theory of value, theory of comparative advantage, and others. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy