Large Trader
A large trader is an investor or organization with trades that are equal to or exceed certain amounts as specified by the Securities and Exchange Commission (SEC). A large trader is defined by the SEC as "a person whose transactions in National Market System (NMS) securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month."Any market participant who is, by definition, a large trader must identify themselves to the SEC and submit Form 13H, "Large Trader Registration: Information Required of Large Traders Pursuant to Section 13(h) of the Securities Exchange Act of 1934 and Rules Thereunder."
Definition: A large trader is defined by the U.S. Securities and Exchange Commission (SEC) as an investor or organization whose trading volume meets or exceeds certain thresholds. Specifically, the SEC defines a large trader as an individual or entity that trades NMS (National Market System) securities amounting to more than two million shares or twenty million dollars in any calendar day, or more than twenty million shares or two hundred million dollars in any calendar month.
Origin: The concept of a large trader originated from the Securities Exchange Act of 1934, which aimed to regulate and oversee trading activities in the securities market. As trading volumes and market complexities increased, the SEC introduced Form 13H in 2011, requiring large traders to provide identification information to better monitor market activities.
Categories and Characteristics: Large traders can be categorized into individuals and organizations. Individual large traders are typically high-net-worth individuals or professional traders, while organizational large traders include hedge funds, investment banks, and other financial institutions. Characteristics of large traders include high trading volumes, high-frequency trading, and significant impact on market liquidity.
Specific Cases: 1. A hedge fund trades over thirty million shares of NMS securities within a month, thus being identified as a large trader by the SEC and required to submit Form 13H. 2. A high-net-worth individual investor trades securities worth thirty million dollars in a single calendar day, also being identified as a large trader and required to provide identification information to the SEC.
Common Questions: 1. What information do large traders need to submit? Large traders need to submit Form 13H, providing detailed information including identification, trading strategies, and trading volumes. 2. What are the consequences of failing to submit Form 13H on time? Failing to submit Form 13H on time may result in fines and other legal consequences.
