Final answer:
An informed trader is one who uses publicly available information and analysis to trade securities. They rely on financial news, market reports, and fundamental and technical analysis in their decision-making process.
Step-by-step explanation:
The type of trader who decides to trade securities based on publicly available information and analysis is known as an informed trader. Informed traders utilize various sources of information such as financial news, market reports, economic indicators, and company earnings releases to make trading decisions. They perform fundamental and technical analysis to evaluate the potential value and future performance of securities, aiming to make profitable trades based on their insights.
An informed trader conducts research and analysis using information available to the public, such as company financial statements, news releases, and market data. They make trading decisions based on their interpretation of this public information and aim to gain an advantage in the market.
The informed trader uses the extraneous information source to seek statistical arbitrage opportunities, while at the same time accommodating the additional risk.