excessive trading

USAGE SUMMARY

The phrase "excessive trading" is correct and usable in written English.
It can be used in the context of finance or investing to describe a situation where an individual or entity engages in too many trades, often leading to negative consequences. Example: "The investor faced significant losses due to excessive trading, which resulted in high transaction fees and poor investment decisions."

✓ Grammatically correct

News & Media

Academia

Science

Human-verified examples from authoritative sources

Exact Expressions

33 human-written examples

The funds are not intended for market timing or excessive trading".

The New York Times

517 (Nov. 8, 2013), Judge Elliot found that respondents engaged in excessive trading in a number of customer accounts.

Harvard University

MFS has stated in its prospectuses that its "funds do not permit market-timing or other excessive trading practices".

The New York Times

In 2000, Mr. Goldis paid $12,500 to a client to settle a complaint of excessive trading.

The New York Times

The rationale was that because these funds were very large and liquid, excessive trading would not harm shareholders.

The New York Times

The aim of the FTT is to generate revenue and to reduce systemic risk by dampening excessive trading.

The Economist

Human-verified similar examples from authoritative sources

Similar Expressions

27 human-written examples

Fear of an excessive trade deficit, and of too much debt at both the federal and household levels.

The New York Times

The report also highlighted risk from imbalances in the global financial system, like excessive trade deficits in some countries and excessive surpluses in others.

The New York Times

The Securities and Exchange Commission said today that it had ordered a former PaineWebber Group Inc. broker to pay $300,000 for making unauthorized and excessive trades for customers.

The New York Times

It wasn't necessary to push unemployment that high – and so much of it hidden on sickness benefit – to end excessive trade union power.

Independent

But he cited an emerging consensus on obliging countries to avoid excessive trade imbalances: namely, too heavy a reliance on exports or imports.

The New York Times

Expert writing Tips

Best practice

When discussing investment strategies, clarify what constitutes "excessive trading" by providing specific metrics or benchmarks.

Common error

Avoid using "excessive trading" to describe legitimate high-frequency trading strategies employed by institutional investors. "Excessive trading" typically implies a detrimental or inappropriate level of activity, whereas high-frequency trading may be a deliberate and well-planned strategy.

Linguistic Context

The phrase "excessive trading" primarily functions as a noun phrase. As Ludwig AI shows, it often acts as the subject or object of a sentence, referring to a specific activity in financial contexts. This activity is generally viewed negatively.

Expression frequency: Common

Frequent in

News & Media

55%

Academia

23%

Science

13%

Less common in

Encyclopedias

3%

Formal & Business

3%

Wiki

3%

Ludwig's WRAP-UP

The phrase "excessive trading" is a noun phrase commonly used to describe trading activities that are considered overly frequent and potentially detrimental. As demonstrated by Ludwig, it is often found in financial and legal contexts, as well as in news reports discussing investment strategies and potential misconduct. The analysis reveals that while grammatically correct, understanding the nuances of this phrase is crucial, as it can be easily confused with legitimate high-frequency strategies. To avoid misinterpretations, provide specific metrics or benchmarks when discussing investment strategies. Ludwig AI also highlighted that "excessive trading" typically conveys negative consequences, such as increased fees and reduced returns. Alternatives like "overtrading" or "churning" offer similar meanings depending on the context.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Overtrading

A shorter, more direct synonym emphasizing trading beyond reasonable limits.

Churning

Specifically refers to excessive trading by a broker to generate commissions.

High-frequency trading

Focuses on the speed and volume of trades, often implying excess.

Aggressive trading

Emphasizes the risk-taking aspect of the trading activity.

Speculative trading

Highlights the uncertainty and potential for losses.

Inordinate trading

Suggests trading that exceeds normal or appropriate levels.

Short-term trading

Focuses on rapid buying and selling, which can be excessive.

Risky trading

Emphasizes the potential for financial loss due to trading activity.

Imprudent trading

Suggests a lack of careful consideration in trading decisions.

Unsuitable trading

Trading that is not appropriate for the client's investment objectives.

FAQs

How is "excessive trading" typically defined in finance?

"Excessive trading", often referred to as churning, involves a broker making trades primarily to generate commissions, rather than to benefit the client. It's characterized by high turnover rates and can lead to significant losses for the investor.

What are some signs of "excessive trading" in an investment account?

Signs of "excessive trading" may include a high number of transactions, frequent buying and selling of securities, and a high turnover rate in the portfolio. These activities often result in increased commission fees and reduced overall returns.

Are there alternatives to "excessive trading" that still allow for active portfolio management?

Yes, instead of "excessive trading", investors can consider strategies like "value investing" or "growth investing", which involve a longer-term perspective and less frequent trading. Diversification and rebalancing are also helpful strategies.

What legal recourse is available if I suspect "excessive trading" in my account?

If you suspect "excessive trading", you can file a complaint with regulatory agencies such as the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). You may also be able to pursue arbitration or legal action to recover losses.