What's the word for this?

Discussion in 'Trading' started by elitetradesman, Aug 21, 2011.

  1. 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?
  2. 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.
  3. Thanks, 1a2b3cppp.