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. Authorization Only

    A type of sale transaction that creates a pending transaction ...
  4. Credit Netting

    A system whereby the number of credit checks on financial transactions ...
  5. Inverse Transaction

    A transaction that can cancel out a forward contract that has ...
  6. Hedging Transaction

    A type of transaction that limits investment risk with the use ...
Related Articles
  1. Stock Analysis

    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. 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.
  3. Investing Basics

    The Importance Of Corporate Transparency

    Clear and honest financial statements not only reflect value, they also help ensure it.
  4. Trading Strategies

    Top Day Trading Instruments

    Day trading is an intense and often appealing activity. Investopedia provides the list of top financial instruments for day trading.
  5. Investing Basics

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  6. Forex Education

    Forex Trading: A Beginner’s Guide

    As businesses continue to expand to markets all over the globe, the need to complete transactions in other countries’ currencies is only going to grow.
  7. Investing Basics

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  8. Forex

    Understanding Book Value

    Book value is a component in many ratios that investors use to evaluate stocks. Find out how it is calculated and what it reveals about a company.
  9. Trading Systems & Software

    The Pros And Cons Of Automated Trading Systems

    Automated trading systems minimize emotions, allow for faster order entry, lead to greater consistency and resolve pilot-error problems.
  10. Mutual Funds & ETFs

    Actively-Managed ETFs: Risks And Benefits For Investors

    Find out how these second-generation ETFs are changing the marketplace.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. What is the average range for the price-to-earnings ratio in the electronics sector?

    Understand the difference between the primary market and the secondary market, and learn which investors are able to participate ... Read Answer >>
  4. How do I place a limit order online?

    Learn how a limit order is placed, the types of stocks it is most useful for and the specifications placed with it to suit ... Read Answer >>
  5. Why does my broker allow me to enter only day orders for short selling?

    Put simply, brokerage firms restrict short sales to day orders because of the complexity of the short sale transaction and ... Read Answer >>
  6. What was the South Seas bubble?

    The British East India Company introduced England to the joys of corporate finance. The company enjoyed a government-backed ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center