What does it mean when a firm "position trades"?

When a firm "position trades," it refers to trading for the firm's account. This means that the firm is buying and selling securities for its own benefit rather than on behalf of clients or customers. In position trading, the firm holds securities in its portfolio, taking a longer-term view on price movements rather than engaging in quick, speculative trades.

Position trading typically involves analyzing market trends and making informed decisions based on expected movements in the securities market. It contrasts with agency trading, where the firm acts on behalf of clients, executing trades for their accounts rather than its own.

This distinction is crucial because it highlights how the firm manages risk and capitalizes on its own investment strategies, rather than solely focusing on facilitating customer transactions or market making.