Which statement best describes passive traders?

Passive traders are best described as those who act on behalf of index or passive funds. This approach to trading is characterized by a long-term investment strategy that typically involves minimal buying and selling. Passive traders aim to replicate the performance of a specific index or benchmark rather than attempting to outperform it through active management.

They invest with a view towards holding securities for extended periods, which aligns with the principles of passive investing that emphasize low turnover, diversification, and low costs. In this strategy, the goal is to track market returns rather than make speculative trades or react to short-term market movements.

High-frequency trading strategies, which involve the rapid execution of a large number of orders to capitalize on small price discrepancies, are not representative of passive trading. Similarly, focusing on quick profits and trading speculative securities imply a more active or aggressive trading approach, contrasting sharply with the foundational characteristics of passive trading.