Late-Day Trading


Late-Day Trading
An unethical (if not illegal) practice of a hedge fund purchasing and then selling securities (usually shares of a mutual fund) after the close of a trading day, but making the transactions appear as though they occurred before the market close.

For mutual funds, net asset value is (NAV) determined at 4pm EST (the market close), and it does not change until the market opens again. Hedge funds involved in late-day trading work out a special relationship with a mutual fund that, usually for higher-than-average fees/commissions, allows the hedge fund to buy and sell mutual fund shares after hours but record the trade at 4pm. This practice gives the hedge fund an opportunity to profit when material information affecting the fund is released after the market close. In such cases, because it is stagnant, the NAV may not represent the actual asset value, which won't materialize until the market opens again - at which time late-day traders sell their shares at a profit.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Christmas Day (Trading) Act 2004 — The Christmas Day (Trading) Act 2004 is an Act of the Parliament of the United Kingdom that prevents shops over 280 m²/3,000 sq ft from opening on Christmas Day. The Act only applies in England and Wales. Shops smaller than the limit are not… …   Wikipedia

  • Late trading — is trading executed after the standard local national exchanges have closed. This is distinct from after hours trading , as they have in context specific meanings, the former may be illegal while the latter is legal.Late tradingIn the mutual fund …   Wikipedia

  • Day care sex abuse hysteria — occurred in the 1980s and early 1990s. [cite news |first= |last= |authorlink= |coauthors= |title=Parole Board recommends Amirault s commutation. |url=http://www.truthinjustice.org/amirault.htm |format=courtesy link from Truth in Justice|quote=The …   Wikipedia

  • Late-2000s financial crisis — The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk …   Wikipedia

  • Late-2000s recession — This article is about economic recession during the early twenty first century. For background financial market events dating from 2007, see Late 2000s financial crisis. Late 2000s recession around the world Africa Americas South America United… …   Wikipedia

  • Late Middle Ages — The Late Middle Ages is a term used by historians to describe European history in the period of the 14th and 15th centuries (AD 1300–1499). The Late Middle Ages were preceded by the High Middle Ages, and followed by the Early Modern era… …   Wikipedia

  • trading — noun ADJECTIVE ▪ busy, heavy, hectic, intensive ▪ In heavy trading, the index closed down 38 points. ▪ quiet ▪ day …   Collocations dictionary

  • Boxing Day — Christmas box redirects here. For the genus of shrubs, see Sarcococca. Boxing Day Observed by some members and former members of the Commonwealth of Nations Type Bank holiday / Public holiday Date 26 December – Bank or public holiday …   Wikipedia

  • Commodity trading advisor — A commodity trading advisor (CTA) is an asset manager who follows a set of systematic investment strategies in futures contracts and options on futures contracts. The advisors originally operated predominantly in commodities markets, but today… …   Wikipedia

  • NBA on Christmas Day — The National Basketball Association s Christmas Day Games is a series of games played on Christmas Day. It has been an annual occurrence since the league s inception in 1946. Unlike with the NFL on Thanksgiving, there are no fixed opponents for… …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.