Sunshine Trade

DEFINITION of 'Sunshine Trade'

A high-volume transaction prematurely revealed to the market before the order is even entered. A sunshine trade is one which just due to the size of the position being taken, a move in the market will result. By revealing some or all of the specifics of the trade, the market can readily prepare itself for the outcome, rather than causing a giant ripple in the market place.

BREAKING DOWN 'Sunshine Trade'

Sunshine trades are meant to reduce confusion and speculation by investors by making the large transactions more transparent. This transparency leads to markets which are considered more reliable and "fair." An example of the opposite of a sunshine trade would be dark pool trading, where most traders do not know who is trading or the size of the transactions.

RELATED TERMS
  1. Sunshine Laws

    Regulations requiring openness in government. Sunshine laws make ...
  2. Position Sizing

    The dollar value being invested into a particular security by ...
  3. Precedent Transaction Analysis

    A valuation method in which the prices paid for similar companies ...
  4. Opening Transaction

    The act of initiating a trade. An opening transaction is the ...
  5. Transaction Identifier

    A unique identifier assigned by a business to each transaction ...
  6. Authorization Only

    A type of sale transaction that creates a pending transaction ...
Related Articles
  1. Markets

    Does Weather Affect the Stock Market?

    Find out if the weather can change the stock market, and why economists and meteorologists will probably always struggle to know the answer.
  2. Markets

    Should You Wade Into The Dark Pools Of Liquidity?

    Dark pools of liquidity allow big investors to trade away from the public eye. They limit market impact but may leave small investors in the cold.
  3. Markets

    An Introduction To Dark Pools

    Dark pools are an ominous-sounding term for private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public.
  4. Trading

    Should You Be Afraid Of Dark Pool Liquidity?

    Don't fear the deep end. Dark pool liquidity can help drive down stock cost for everyday investors.
  5. Trading

    Optimal Position Size Reduces Risk

    Finding the right position size can minimize loss for a trader. Find out how.
  6. Retirement

    Find the Top Retirement Cities in Colorado

    Mountain scenery, sunshine and affordability – that's what the Centennial state has to offer, plus great work and education opportunities as well.
  7. Trading

    The Multiple Lives Of A Stock Trader

    Any trading career will have its ups and downs. Find out how to maximize the good times.
  8. Investing

    An Introduction To Dark Pools

    Dark pools are private exchanges for trading large chunks of securities that are not accessible to the public.
  9. Trading

    How To Start Trading: Trading Plan Development

    A trading plan should including rules about how and when to place trades that includes: the markets to be traded, primary chart intervals, indicators and settings, rules for position sizing, ...
  10. Investing

    What is the Secondary Market?

    The secondary market is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves.
RELATED FAQS
  1. How do sunshine laws help investors?

    Sunshine laws are U.S. federal and state laws that require regulatory authorities' meetings, decisions and records to be ... Read Answer >>
  2. Why are financial markets considered to be transparent?

    Understand the efficient market hypothesis and how it relates to financial markets. Learn why financial markets are considered ... Read Answer >>
  3. How are arm's-length transactions determined by law?

    Determine if transactions are conducted at arm's length by checking if the parties to a contract are independent and transact ... Read Answer >>
  4. What's the difference between a capital market and the stock market?

    Learn about the differences between stock market and capital market. Identify several important stock markets and understand ... Read Answer >>
  5. What's the difference between a market order and a limit order?

    Buy and sell trades with market orders at the present stock price and execute limit orders if the stock price falls within ... Read Answer >>
  6. Are arm's length transactions always better than transactions not at arm's length?

    Transactions not at arm's length have real tax and other consequences for individuals and businesses, but they are not necessarily ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center