A trade evolution is an evolution that triggers only when a Pokémon is traded to another player, covering species such as Kadabra, Machoke, Graveler, and Haunter in Generation I. Some trade evolutions also require the Pokémon to hold a specific item during the trade.
Trading to evolve has existed since Pokémon Red and Blue, built for a system with a link cable and two copies of the game. Kadabra becomes Alakazam, Machoke becomes Machamp, Graveler becomes Golem, and Haunter becomes Gengar the moment the trade completes, with no level requirement at all. A freshly caught Haunter can become a Gengar at any level, as long as you have someone to trade with.
Generation II added item trades. Onix becomes Steelix only while holding a Metal Coat, Scyther becomes Scizor the same way, and Seadra becomes Kingdra holding a Dragon Scale. Later generations kept adding to the list, including Shelmet and Karrablast in Generation V, which evolve only when traded for each other, and Pumpkaboo and Phantump in Generation VI.
The mechanic creates a practical problem: you need a partner you trust to trade the Pokémon back, since the person receiving it owns it after the trade. Modern online trading made that easier but not risk free. Some later games soften it. Pokémon Legends: Arceus added the Linking Cord item, which triggers trade evolutions without another player, a change many solo players had wanted for decades.
In play"Trade me that Haunter and I will trade your Gengar straight back."