It's sometimes thought that trade books are oversized paperbacks. But a trade book can be a hardcover or a paperback of any size. The term "trade" refers to the way the books are distributed, not their formats.
In contrast to trade books, mass market paperbacks are sold through non-bookstore venues, such as grocery stores, drug stores, newsstands and chain stores, though mass market books can also be found in bookstores. They typically have covers designed to appeal to a wider audience than trade books.
A book called a "first trade edition" comes from the first printing of books available for sale to the public. Occasionally, a book will get a small, limited printing, sometimes signed by the author, that is not intended for sale, but for friends or for promotions for a publishing house's book club. Books from these limited printings are known as "true first editions."
Trade books--both hardcover and paperback--are generally more expensive than mass market books. They are also usually of higher quality, with stronger paper.
Often books begin as trade--either hardcover or paperback--then later are published in a mass market edition. The distinction between trade and mass market are blurring, as both types of books are often found in the same stores.