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Overtrading

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Overtrading
Overtrading is over expansion (of sales) relative to available resources. It is also, in US usage, a synonym of churning.

 


Overtrading
In new issue underwritings, a situation in which a broker-dealer offers to buy a security from a client at premium. In return, the client will purchase shares of the new issue.

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.

Overtrading - A situation where a business attempts to raise production without increasing the size of its working capital.

Overtrading: The instant nature of electronic futures trading coupled with low commission costs and tight spreads can encourage a trader to take additional trades to those determined by their trading plan.

Unjustified overtrading by a stockbroker or fund manager. Private clients have long claimed that brokers 'churn' their portfolios, switching...(Read more)
Circuit Breaker ...

The situation of inadequate liquidity is known as overtrading. The causes can be as a result of negative events, such as continuing losses, the insolvency of a sizeable debtor, or over indebtedness, but they can also be caused by expanding too fast.

Overtrading: a paradoxical situation when a company does so much business that stocks and debtors rise leading to working capital and liquidity difficulties.

This practice violates the NASD Fair Practice Rules. It is also referred to as "churn and burn", "twisting" and "overtrading".
2. A period of heavy trading with few sustained price trends and little movement in stock market indexes.

In a rights issue, arrangement by which shareholders are given the right to apply for any shares that are not taken up.
Overtrading ...

Underwriter (finance term)
Fictitious Group (insurance term)
Underwriting (in accounting)
Sell Down (in banking)
Underwriting Agreement (in banking)
Underwriting Spread (in banking)
Overtrading (business term) ...

overtrading The excessive trading in a client's account by a broker, seeking to maximize... overvalued Having the quality of being perceived as too expensive. Opposite of undervalued. overweight See overweighted.

See also: Overnight, Expense, Saving, Out of The Money, Operating profit

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