overtrading

Overtrading

Excessive broker trading in a discretionary account. Underwriters persuade brokerage clients to purchase some part of a new issue in return for the purchase by the underwriter of other securities from the clients at a premium. This premium is offset by the underwriting spread.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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

overtrading

a situation in which a firm expands its production and sales without making sufficient provision for additional funds to finance the extra WORKING CAPITAL needed. Where this happens the firm will run into LIQUIDITY problems and can find itself unable to find the cash to pay suppliers or wages. See also WORKING-CAPITAL RATIO, CURRENT RATIO, CASH FLOW.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

overtrading

a situation where a FIRM expands its production and sales without making sufficient provision for additional funds to finance the extra WORKING CAPITAL needed. Where this happens, the firm will run into LIQUIDITY problems and can find itself unable to find the cash to pay suppliers or wages. See CASH FLOW.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
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