Trading error definition
Trading error means the negligent failure of an insured providing “financial services” which are covered under the terms of this policy, to follow a “client’s” specific instructions, in a commercially reasonable manner and within a commercially reasonable time, with regard to the investment, reinvestment or disposition of the “client’s” money or “securities”.
Trading error means the failure to buy or sell “securities”, otherwise covered under this policy, as specifically requested by a “client” or intended by an insured leading to losses for that “client”. For example, and not by way of limitation, the failure to purchase 100 shares of an appreciating stock, as requested by a “client”, might result in losses for the “client” and a valid “trading error” “written claim” by the “client”. However, the erroneous purchase of 1000 shares of that stock, instead of 100, would not result in losses to the “client” and hence would not constitute a “trading error” claim covered by this policy; the “client” received, and should be charged for, the 100 shares requested; the balance should be paid for by the insured and go into its inventory to be kept or disposed of as the insured wished.