Late trading is trading that executes after the market closes, while charging the share price of when the market was still open. This form of trading may be illegal, and is distinct from official
after-hours trading.
Mutual funds
In the
mutual fund
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV ...
context, ''late trading'' involves placing orders for mutual fund
shares after the close of the stock market, 4:00 p.m for the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...
, but still getting that day's closing price, rather than the next day's opening price. The
price of mutual funds is usually set only once per day, so intraday prices are not applicable.
Controversy
In the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., federal district, five ma ...
this practice is illegal under
SEC rules but many mutual fund managers appear to have allowed exceptions for certain
hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...
s and other favored investors who were able to obtain that day's price, notwithstanding that their orders were received after-hours.
See also
*
2003 mutual fund scandal
References
Investment
Commercial crimes
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