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Convincing a customer that trades are necessary in order to generate a commission. This is an unethical practice.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
To make both buy and sell orders through different brokers, usually in large quantities, to create the impression of increased interest in a security and thereby raise its price. An investor churns if he/she has a long position on the security and wishes to sell it at an artificially high price. Churning is a form of manipulation, and is illegal under the Securities Exchange Act of 1934. See also: Fix.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An attempt to convince an individual to sell one product and purchase another product, primarily so the salesperson can earn additional commissions. In the brokerage business, twisting is usually called churning. Twisting, the more general term, applies to the sale of other products as well, such as insurance policies.
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.