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:
“I doubt if a single individual could be found from the whole of mankind free from some form of insanity. The only difference is one of degree. A man who sees a gourd and takes it for his wife is called insane because this happens to very few people.”
—Desiderius Erasmus (c. 1466–1536)
“With its frame of shaking curls all in disarray,
earrings swinging,
make-up smudged by beads of sweat,
eyes languid at the end of lovemaking,
may the face of the slim girl
who’s riding on top of you
protect you long.
What’s the use
of Vi.s».n»u, iva, Skanda,
and all those other gods?”
—Amaru (c. seventh century A.D.)