Dictionary Home »
Webster's New World Finance and Investment Dictionary » scale-up buying
scale-up buying
scale-up buying definition - finance
Buying
into strength and adding onto that position as prices in the market continues
to rise. Scale-up buying involves trading with the trend, using the marketÂ’s
money to expand the position because there is a smaller risk of a margin call.
For example, if a trader buys crude oil at $35 a barrel and the market goes to
$36, $1 in profit has been made. The $1 profit is used to purchase more oil. If
oil goes up to $37, the trader uses the larger profit to purchase more oil. If
the average price now goes to $38, the trader has a $2 profit on a larger
position. However, if the market falls, then the trader risks losing money. This
term is typically used in the futures market.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
Comments
Improve this definition.
Browse dictionary definitions near scale-up buying
Share on Facebook