Illegal practice of obtaining the next day's net asset value (NAV) of a mutual fund's shares and using this information to buy or sell those shares at the previous day's prices. As mutual funds usually compute the NAV at the close of a trading day (4:00 p.m. Eastern Time) for the next day's trades, a trader placing a buy or sell order after the closing time can still get that day's prices and can gain an unfair advantage over other traders. According to the SEC, "Late trading violates the federal securities laws ... and defrauds innocent investors." Late trading, however, is not the same as after-hours trading which is a legal practice.

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