What is the term used when a dealer trades from their own inventory?

When a dealer trades from their own inventory, the term used is "Position Trading." This refers to the practice where a dealer takes a certain position in a security or asset, holding it in their inventory, and subsequently buys or sells from this inventory based on their market outlook or trading strategy.

Position trading typically involves a longer time horizon compared to other trading strategies and is characterized by the dealer's intention to benefit from price fluctuations over that period. In essence, dealers carefully manage their positions in securities, looking to buy low and sell high, thus making profits on the trades conducted from their owned inventory.

This concept emphasizes the role of dealers as not just intermediaries, but also as participants who hold and manage assets in anticipation of future profits, differentiating it from other terms that might apply in trading contexts. For instance, speculative trading often involves a greater focus on short-term price movements and often does not imply holding inventory in the same way.