Commercial Trader

In general, the term "commercial trader" refers to anyone who trades on a certain scale, usually working for a financial institution. The distinction here is with retail traders...those regular folks who move 100-share lots around on their Ameritrade accounts based on research they did on Yahoo Finance, trying to compete against the top commercial traders who make $20 million a year with their unattainable pedigrees. Meanwhile, the commercial trader may make bets of hundreds of millions or billions of dollars based on proprietary algorithms created by a team of MIT geniuses.

There's a particular connotation of "commercial trader" that applies specifically to the futures market.

The futures market allows people to arrange to purchase commodities in the future. You buy or sell contracts for a certain amount of stuff at a certain price to be delivered on a certain date.

Some people use the market to acquire goods; they actually want to buy barrels of oil or tens of thousands of pounds of pork bellies. Others are in it just for speculation and/or fun. There's a third group that uses the market to hedge positions elsewhere. This last category constitutes "commercial traders," according to the CFTC, the group that regulates commodity futures trading.