Over the next eight months the following activity took place in the client’s account:
?356 trades (178 purchases and 178 sales);
?Purchases of approximately $8.2 million;
?Commissions charged of $25,258, this being more than half the client’s
original investment;
?Account losses of approximately $39,000;
?Turnover ratio of over 247, where a ratio of 6 is normally indicative of
excessive trading;
?Cost equity ratio of 83% this being the return required just to break even;
?Holding periods for most securities of 5 days or less with 80 securities being sold the same day as they were purchased.
At various times throughout this period the client indicated that the trading in her account was excessive and that she could not afford the commissions being charged.
?356 trades (178 purchases and 178 sales);
?Purchases of approximately $8.2 million;
?Commissions charged of $25,258, this being more than half the client’s
original investment;
?Account losses of approximately $39,000;
?Turnover ratio of over 247, where a ratio of 6 is normally indicative of
excessive trading;
?Cost equity ratio of 83% this being the return required just to break even;
?Holding periods for most securities of 5 days or less with 80 securities being sold the same day as they were purchased.
At various times throughout this period the client indicated that the trading in her account was excessive and that she could not afford the commissions being charged.