Uninformed Trader
Market Microstructure glossary · Adverse Selection & Information Asymmetry
Definition
A trader who does not have reliable private information about fundamental value. Includes investors, hedgers, and gamblers.
Uninformed Trader in plain English
An Uninformed Trader is simply someone trading WITHOUT any secret edge about what a stock is truly worth — they're not acting on inside knowledge. That covers a huge range of normal people: someone parking savings for retirement, a business hedging to reduce risk, or someone just gambling for fun. It's like betting on a coin flip versus betting when you've secretly seen the coin is weighted — the uninformed trader is playing the fair coin. This label matters because markets behave very differently depending on how much of the action comes from people who actually know something versus people who don't.
Learn these first
Practice Uninformed Trader
Related Market Microstructure terms
Market Microstructure practice questions · Market Microstructure flashcards · Market Microstructure study guide