Excessive broker trading in a discretionary account. Underwriters persuade brokerage clients to purchase some part of a new issue in return for the purchase by the underwriter of other securities from the clients at a premium. This premium is offset by the underwriting spread.
Nearby TermsOver-the-Counter Bulletin Board Over-the-Counter Option Overtrading Overvalued Overweight
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University