overtrade

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Overtrade

1. To make both buy and sell orders through different brokers to create the impression of increased interest in a security and thereby raise the price. This is a form of price manipulation and is forbidden by the Securities Exchange Act of 1934. It is less formally known as churning.

2. In brokering, to make more trades on a client's holdings than are necessary in order to maximize commissions. Overtrading is illegal.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

overtrade

1. To purchase a client's securities at an above-the-market price in return for the client's purchase of part of a new issue.
2. See churn.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
To expect management teams to have forgotten the lessons learned in respect of over-trading or working capital is naive.
In such instances, the strategy to avoid over-trading is to take "bite-sized portions" of the new deals.
For a chain of hearing aid centres over-trading might be reflected by difficulty in recruiting specialist staff or in monitoring what is happening across a far-flung empire.
But rather than a return of the 'zombie business' phenomenon, R3 North East chair Allan Kelly believes the late payment and over-trading problems traditionally associated with economic recovery support the rise.
Alistair also expects that as history has shown us in the past, as the economy improves there can be corporate casualties caused by over-trading, which means Insolvency Practitioners, and their agents get busier.
"The number one casualty-causer for businesses in this environment is over-trading. Biting off more than they can chew," he says.
While the most important reason for failure, unsurprisingly, is lack of demand, the second most important is over-trading. In other words, taking on more work than can be delivered.
That many banks were over-trading beyond their total combined equity was never reported by external auditors, while financial journalists never commented on their extremely high-risk ventures.
A real danger is a failure to plan the financial requirements carefully, which can result in over-trading.
In abstaining from trying to call the shorter-term gyrations in markets we are heeding the warning of our Behavioural Finance team against over-trading. Volatile markets seem to call for more active allocation, but in reality - particularly for private-client portfolios - the best advice is often to take a longer-term view and stick with it.
Midland entrepreneur Craig Wright, chief executive of European elecronics manufacturer Exception, warned firms against the perils of over-trading as they emerge from the recession.
Flushed with this modest success, Cope then made the classic small business mistake of 'over-trading' and trying to expand too rapidly.