Trading securities are securities that have been purchased by a company for the purposes of realizing a short-term profit. A company may choose to speculate on various debt or equity securities if it identifies an undervalued security and wants to capitalize upon the opportunity. Revenue is recorded when a product is sold or a service is provided. But the exact timing, and thus the amount of revenue listed on an income statement, depends on a company’s accounting method. If a business uses cash accounting, revenue is recognized when a product or service is paid for, which may be after it is sold. As we note from Starbucks SEC Filings, Trading securities include equity mutual funds and exchange-traded funds. There are three classifications of securities as per accounting – trading securities, securities that are held to maturity, and available for sale securities. We will understand more about the securities that are trading in detail.