Sunshine Trade

There we were, zoning out in a staff meeting again, when all of a sudden we zone back in upon hearing the words ”sunshine trade.” “Sunshine trade?!” we exclaim. “That sounds like a fabulous idea! We’d like to trade all of our cloudy days for sunshine ones, please.” After everyone in the room is done looking at us like we just grew another head, our coworker Cindy pulls us aside and tells us what a sunshine trade really is.

A “sunshine trade” is when an investor announces their intent to make a big trade before they actually make it. The point is to lessen the impact the trade will have on the particular stock and/or on the stock market, since people will be prepared for it to happen.

Our organization owns a bunch of shares of stock in Makey Makey, Inc., a manufacturing company that we’re considering selling. But we don’t want the market to overreact or think there’s something fishy going on, so we’re going the sunshine trade route. We’re going to make a public announcement about our intent to sell 75% of our Makey Makey shares, give it a day or so for everyone to absorb the news and buy and sell accordingly, and then we’ll execute the trade.

So although we love the idea of being able to swap out cloudy days for sunny ones, we have to admit that Cindy’s explanation makes a lot more sense in the grand scheme of things.