Churning

What Does Churning Mean?
1. An unethical practice employed by some brokers to increase their commissions by excessively trading in a client's account. 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.

Investopedia explains Churning
Another negative result for the client is being stuck with higher tax bills.

Related Terms

Bucket Shop
Bucketing
Circular Trading
Front Running
Guilt Edged Investment
Jitney
National Association of Securities Dealers - NASD
Portfolio Pumping
Pump and Dump
Wrap Account
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