A proprietary trader uses a financial firm’s capital to make a direct profit. Traders analyze stock market trends to decide how to trade the money to maximize the initial investment. Traders keep a portion of the profit they make for firms or banks, then continue trading other capital, such as stock market shares, to increase profit margins. Some proprietary traders employ arbitrage, which is when a stock or commodity varies in price in different markets. The trader takes advantage of the price difference to buy in the lower market then sell in the higher market to turn a profit for the firm.