Free riding (also known as Freeriding or Free-riding) is a term used in the stock-trading world to describe the practice of buying shares or other securities without actually having the capital to cover the trade. This is possible when recently bought or sold shares are unsettled, and therefore have not been paid for.
Since stock transactions usually settle after three business days, a crafty trader can buy a stock and sell it the following day (or the same day), without ever having sufficient funds in the account.
Read more about Free Riding: Trade Day + 3 Days, Free Riding Violation, S.E.C. Enforcement Actions, Good Faith and Free Riding, Liquidation and Free Riding, Economics
Famous quotes containing the words free and/or riding:
“It is not enough to demand insight and informative images of reality from the theater. Our theater must stimulate a desire for understanding, a delight in changing reality. Our audience must experience not only the ways to free Prometheus, but be schooled in the very desire to free him. Theater must teach all the pleasures and joys of discovery, all the feelings of triumph associated with liberation.”
—Bertolt Brecht (1898–1956)
“Deep with the first dead lies London’s daughter,
Robed in the long friends,
The grains beyond age, the dark veins of her mother,
Secret by the unmourning water
Of the riding Thames.
After the first death, there is no other.”
—Dylan Thomas (1914–1953)