Large Trader

DEFINITION of 'Large Trader'

An investor or organization with trades that are equal to or in excess of certain amounts as specified by the United States Securities And Exchange Commission (SEC). A large trader is defined by the SEC as "a person whose transactions in NMS securities equal or exceed 2 million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month." Any market participant who is, by definition, a large trader must identify himself or herself to the SEC and submit Form 13H, "Large Trader Registration: Information Required of Large Traders Pursuant To Section 13(h) of the Securities Exchange Act of 1934 and Rules Thereunder."

BREAKING DOWN 'Large Trader'

As of 2011, the SEC requires that all traders who execute a substantial amount of trading activity, as measured by volume or market value, identify themselves to the SEC by registering with the SEC through Form 13H. The SEC assigns each large trade an identification number, and collects information and analyzes each large trader's trading activity. In addition, certain registered broker-dealers are required to adhere to SEC rules regarding recordkeeping, reporting and monitoring of large traders who execute transactions through the broker-dealer.

The SEC initiated large trader reporting in response to the development of trading technology that enables trading in substantial volumes and fast execution speeds. In addition, the SEC cited the rising prominence of large traders and high-frequency traders (HFTs) in the markets and the need to have improved access to their trading activity.

Large trader reporting is intended to help the SEC identify individuals engaged in significant market activity in order to analyze their market activity and determine the impact of their trading activity.

Large traders must submit an "Initial Filing" through Form 13H and an "Annual Filing" for each applicable calendar year. A previously identified large trader who has not conducted the identifying amount of trading activity as measured by volume or market value may file for an Inactive Status, and can remain inactive and exempt from the filing requirements until the large trader trading level is made again.

RELATED TERMS
  1. SEC Form S-2

    A form from the Securities and Exchange Commission (SEC) that ...
  2. SEC Form 15

    A filing with the Securities and Exchange Commission (SEC), also ...
  3. 500 Investor Rule

    A SEC stipulation requiring a company that exceeds 500 individual ...
  4. SEC Form 1

    An application for and amendments to an application for registration ...
  5. SEC Form 18

    A filing with the Securities and Exchange Commission (SEC), more ...
  6. SEC Schedule 13D

    A report that must be submitted to the Securities and Exchange ...
Related Articles
  1. Financial Advisor

    How To Get A Job At The SEC

    Want to make a good living taking on those renegade trading rascals on Wall Street? Here are some tips to help you get in the door at the SEC.
  2. Markets

    Understanding the SEC

    The SEC's triple mandate of investor protection, maintenance of orderly markets and facilitation of capital formation makes it a vital player in capital markets.
  3. Investing

    How A Company Files With The SEC

    Filing with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
  4. Investing

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  5. Markets

    What's the SEC?

    The Securities and Exchange Commission (SEC) is an independent agency of the United States government. The mission of the SEC is to enforce securities laws passed by congress. These laws aim ...
  6. Markets

    The SEC: A Brief History Of Regulation

    The SEC has continued to make the market a safer place and to learn from and adapt to new scandals and crises.
  7. Markets

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  8. Financial Advisor

    A Day In The Life Of A Day Trader

    Day trading has many advantages and, while we often hear about these perks, it's important to realize that day trading is hard work.
  9. Trading

    The Daily Routine Of A Swing Trader

    From pre-market to after hours, see what you need to do to capture gains quickly.
  10. Trading

    Detrimental Traders

    Traders have many different ways of exposing their intentions. Exposing these intentions can definitely have some significant negative consequences.
RELATED FAQS
  1. How do I know if I am buying unregistered securities or stocks?

    All securities, including stocks, bonds and notes, must be registered with the Securities and Exchange Commission (SEC) before ... Read Answer >>
  2. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Answer >>
  3. What is an unregistered security scam?

    Each year, millions of Americans lose money to con artists who convince them to invest in companies through "private offerings" ... Read Answer >>
  4. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

    Learn about how the SEC uses the trading volume formula as one requirement for an exemption to the ban on the resale of restricted ... Read Answer >>
  5. How often do mutual funds report their holdings?

    Learn how mutual funds are required by the Securities and Exchange Commission to disclose their portfolio holdings on a quarterly ... Read Answer >>
  6. If an issuer wishes to register a security in the state ...

    The correct answer is a. Registration by coordination is permitted when the issuer has filed a registration application with ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center