{"id":10679,"date":"2022-06-01T09:19:10","date_gmt":"2022-06-01T13:19:10","guid":{"rendered":"https:\/\/www.silverlaw.com\/blog\/?p=10679"},"modified":"2022-06-01T09:19:10","modified_gmt":"2022-06-01T13:19:10","slug":"did-excessive-options-trading-lead-to-churning-in-my-account","status":"publish","type":"post","link":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/","title":{"rendered":"Did Excessive Options Trading Lead To Churning In My Account?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-10372 size-full\" src=\"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall.jpg\" alt=\"As a Securities and Exchange Commission report found, options trading is highly technical and involves holding stocks for short periods of time. Given the complexity of these deals, customers frequently depend on their brokers to make almost all of their trading decisions. Unscrupulous brokers know this, and they use their customers\u2019 reliance for churning\u2014when a broker engages in excessive trading on customers\u2019 behalf to generate more commissions. But churning is illegal, and brokers who have engaged in churning can be required to compensate their clients for related losses.    Because customers rely so heavily upon brokers for options trades, brokers have additional requirements for making these trades. For example, they must know the customers\u2019 financial position, their investment goals, and their age.  And customers must understand the risks of options training. But it isn\u2019t enough for them to understand that options trading is risky, generally speaking. The brokers should explain the risks of each specific deal. And they should weigh if their customers understand the trade and have the financial wherewithal to make it, before the trade.\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall.jpg 300w, https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall-180x120.jpg 180w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><a href=\"https:\/\/www.sec.gov\/litigation\/opinions\/2015\/33-9798.pdf\" target=\"_blank\">As a Securities and Exchange Commission report found<\/a>, options trading is highly technical and involves holding stocks for short periods of time. Given the complexity of these deals, customers frequently depend on their brokers to make almost all of their trading decisions. Unscrupulous brokers know this, and they use their customers\u2019 reliance for <em>churning<\/em>\u2014when a broker engages in excessive trading on customers\u2019 behalf to generate more commissions. But churning is illegal, and brokers who have engaged in churning can be required to compensate their clients for related losses.  <a href=\"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/#more-10679\" class=\"more-link\">Continue reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As a Securities and Exchange Commission report found, options trading is highly technical and involves holding stocks for short periods of time. Given the complexity of these deals, customers frequently depend on their brokers to make almost all of their trading decisions. Unscrupulous brokers know this, and they use their customers\u2019 reliance for churning\u2014when a [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[589,1656],"tags":[],"class_list":["post-10679","post","type-post","status-publish","format-standard","hentry","category-churning-2","category-options"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Did Excessive Options Trading Lead To Churning In My Account? &#8212;<\/title>\n<meta name=\"description\" content=\"Options trading is technical and involves holding stocks for short periods of time. Customers depend on brokers to make trading decisions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Did Excessive Options Trading Lead To Churning In My Account? &#8212;\" \/>\n<meta name=\"twitter:description\" content=\"Options trading is technical and involves holding stocks for short periods of time. Customers depend on brokers to make trading decisions.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Silver Law Group\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Did Excessive Options Trading Lead To Churning In My Account? &#8212;","description":"Options trading is technical and involves holding stocks for short periods of time. Customers depend on brokers to make trading decisions.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/","twitter_card":"summary_large_image","twitter_title":"Did Excessive Options Trading Lead To Churning In My Account? &#8212;","twitter_description":"Options trading is technical and involves holding stocks for short periods of time. Customers depend on brokers to make trading decisions.","twitter_image":"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall.jpg","twitter_misc":{"Written by":"Silver Law Group","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/","url":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/","name":"Did Excessive Options Trading Lead To Churning In My Account? &#8212;","isPartOf":{"@id":"https:\/\/www.silverlaw.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/#primaryimage"},"image":{"@id":"https:\/\/www.silverlaw.com\/blog\/did-excessive-options-trading-lead-to-churning-in-my-account\/#primaryimage"},"thumbnailUrl":"https:\/\/www.silverlaw.com\/blog\/wp-content\/uploads\/2022\/01\/FiverRecoverysmall.jpg","datePublished":"2022-06-01T13:19:10+00:00","author":{"@id":"https:\/\/www.silverlaw.com\/blog\/#\/schema\/person\/de64d999508b1ad10d608a99f0d2e752"},"description":"Options trading is technical and involves holding stocks for short periods of time. 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