Question

What are the assets and liabilities in a trading account?

Answer 1

Trading assets are a collection of securities held by a firm for the purpose of reselling for a profit. Trading assets are recorded as a separate account from the investment portfolio. Trading assets may include U.S. Treasury securities, mortgage-backed securities, foreign exchange rate contracts and interest rate contracts. Trading assets include those positions acquired by the firm with the purpose of reselling in the near term in order to profit from short-term price movements. Banks that make a market in certain securities can do so with these trading assets.