Trade is the act of voluntarily exchanging one value for another. (Theft is when the value is exchanged involuntarily).
Under Capitalism — the social system based on individual rights — one may obtain property from others only by their voluntary consent. By banning the initiation of physical force from all relationships (compulsion), capitalism leaves only one way for people to deal with each other: through the peaceful means of persuasion, by appealing to another’s self-interest. This form of dealing with others is the highest form of voluntary social cooperation: trade.
A trade is a voluntary exchange of values between two (or more) parties for their mutual benefit. In a free-market, trade only takes place only when the seller and the buyer agree to the same terms of exchange free from the threat of physical violence and fraud.
Voluntary means that either party initiates no force; that both parties enter the trade of their free-will. That is with no guns, knives, or fists pointed at their heads, hearts, or backs.
Mutual benefit means that both parties benefit since they think they both think are will be better off by trading then if they did not.
For the buyer, trade means that one is free to buy on whatever terms the buyer finds agreeable. If the buyer does not like the seller’s offer, the buyer is free to refuse, and is free to go somewhere else, or is free to produce the good himself, if so able. No one is morally allowed to physically force the buyer to change his terms of buying, by threatening to expropriate the holdings of the buyer’s bank account, or by threatening to imprison the buyer, if the buyer does not voluntarily agree to the terms.
For the seller, trade means that one is free to sell on whatever terms others voluntarily agree to. If the seller does not like the buyer’s offer, the seller is free not to accept them and is free to find another buyer. No one is morally allowed to physically force the seller to change his selling terms, by pointing a gun to his head, or by threatening to fine him a million dollars a day, or by threatening to imprison the seller, if the seller does wish to change his terms of sale for his property.
Barter (direct trade) is where a good/service is exchanged directly for another good/service for consumption, i.e., not for further trade.
A monetary (indirect) trade is where a good/service is exchanged for money, which is then used to be exchanged for another good/service for consumption.