Investments glossary


Overtrading refers to excessive buying and selling of stocks by either a broker or an individual trader. Both are entirely different situations and have very different implications. An individual trader, whether working for themselves or employed on a trading desk by a financial firm, will have rules about how much risk they can take, including how many trades are appropriate for them to make. Once they have reached this limit, to continue trading is to do so unsoundly. While such behavior may be bad for the trader or bad for the firm, it is not regulated in any way by outside entities.

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