Trade Bill is a negotiable instrument, which can be sold/purchased in the market.
Example- Bills Receivable. Suppose we sell goods worth Rs 10 lacs to a party, and they instead of money, give a signed paper confirming that the said amount shall be paid at end of 3 months to the bearer of the Bills Receivable. Now, we can sell this signed bill to Mr X, at Rs 9 lacs and receive the amount right now.
Question- Why are bills prepared?
Answer- Because debtors can't be sold, but this way, it is possible to do so and get your money on time.
Question- Why will someone buy the bill?
Answer- to earn. The person whol we have sold the bill will receive Rs 10 lacs, but have paid to us only Rs 9 lacs. Difference of Rs 1 lacs shall be his income.