Who is a Responsible Designated Trader (RDT)?

• A. A trader who executes client orders exclusively
• B. A trader who carries out Market Making duties
• C. A trader who manages administrative tasks
• D. A trader who specializes in long-term investments

Answer: (B)

A Responsible Designated Trader (RDT) is a trader who carries out Market Making duties. Market making involves providing liquidity to the market by being willing to buy and sell securities at any time. This role is crucial in ensuring that there are buy and sell orders available, which helps to facilitate trading and maintain stable prices for securities. An RDT is responsible for minimizing risks associated with trading activities while ensuring compliance with regulations and market standards.

In the context of this role, the RDT must exhibit a broad understanding of market dynamics and engage in proactive trading strategies to accommodate supply and demand effectively. By performing market-making duties, the RDT plays a vital role in the functioning of the financial markets and helps to streamline the trading process for other participants.

The other choices describe different roles that do not align with the specific responsibilities attributed to an RDT within market dynamics.