Hey all, What do you call this activity- opening a postion and then closing it. I always thought this is called a round trip trade, but investorwords.com says a round trip trade is the act of buying and selling securities over a short period of time. So, what'd be the correct term for opening a postion and then closing it?
A round trip is opening a position and then closing that position. If you do 3 of them in a one week period you trigger the pattern day trader rule. But technically, I don't think there is a time limit. If you buy X shares of ABC stock and then sell those X shares, whether it's 5 minute from now or 5 years from now, that's a round trip.