Financial securities that are held by an entity for the purpose of selling or repurchasing them in the short term to make a profit. These securities are classified as financial assets held for trading (HFT) if the entity acquires or has acquired them principally for the purpose of being sold or repurchased in the near term.
These securities form part of a portfolio of identified financial instruments that are managed, as one group, and for which there is evidence of a recent pattern of short-term profit-taking. Held for trading securities might also be classified as for trading if these securities are a derivative (but not a financial guarantee contract or a designated and effective hedging instrument).
These securities are measured at fair value and any unrealized gains or losses arising from them are recognized as profit or loss on the income statement (profit and loss statement), and will reflected in retained earnings as part of an entity’s shareholders’ equity. Fair value of a held for trading financial securities is recognized in the income statement in a line item titled net income/ (loss) from trading.
Held for trading securities (HFT securities) are also known as trading securities.
