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Finance Dictionary and Glossary of Investment Terms
Overtrading
Definition 1.
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.
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Definition 2.
Excessive trading in a client's account by a broker seeking to maximize commissions regardless of the client's best interests, in violation of NASD rules. also called twisting or churning.
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Definition 3.
1. Excessive buying and selling of an investors stocks by their broker, also known as churning.2. When a company is growing its sales faster than they can finance them, this usually leads to enormous accounts payable.
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