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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: sherry who wrote (381)	6/9/1999 3:10:00 PM
From: LPS5	Respond to of 18137

Churning usually indicates a high-volume of trades done in an account (usually by a broker) in order to generate commission income, done without regard for the aggregate commission cost created and with little or no regard for the goals stated and/or the issues traded (stocks, penny stocks, weird convertibles, etc). Churning almost exclusively arises with regard to discretionary accounts; i.e., one in which an individual gives decision-making authority to another individual, in this case registered (as opposed to a third-party authorization where the decision-making entity is UNREGISTERED). However, for a discretionary account, if the individual specified that daytrading is okay, and that their goals are speculative and aggressive, and they meet certain suitability guidelines, it's probably okay. With regard to an individual trading their own account, obviously churning becomes a moot point - they are the decision-making entity, and have responsibility for what they want to do. LPS5