Churn Rate
Companies like Comcast and Netflix and Verizon have monthly subscribers to their service. When a subscriber leaves, they say that the sub "churned" off the service.
Why "churn"? Because the process is often circular, with the marginal subscribers leaving for a few months, attracted to some discount promotion by a competitor...only to return when the original service offers the same discount. The rate of this "firing of the service" is the churn rate.
Like...Verizon, in a given area, might have a million subs. About 10,000 per month fire Verizon, either because they've left to go to AT&T or Sprint, or have become Amish, or, uh...dead. That churn rate then is 1 percent a month.
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Finance: What Does it Mean to Churn an A...12 Views
Finance allah shmoop What does it mean to churn an
account All right Well back in colonial times before america
was the good old u s a You know what
That i po and seventeen seventy six colonists would churn
cream into butter back then churning involved moving a plunger
in a wood bucket over and over and over again
Really good for the traps and lattes there Not exciting
but well that's What happens when there's No better technology
today churning is something illegal that stock brokers dio and
remember normally brokers pay their own rent by getting paid
a commission off of each trade they do for customers
So churning in the financial sense here means that stockbrokers
are making tons of trades they really don't need to
be making in a client's account in order to generate
mohr commission for themselves they're churning the account to generate
dough for themselves Illegal very bad And sometimes it can
be difficult to detect or stop You know think about
little old ladies not really paying attention to our account
or ah cardiologists who really has no idea how wall
street works They have no idea of the brokers churning
Or not Well if you fall prey to a broker
who's involved in churning you'll end up overpaying them in
commissions And you might even have to pay extra taxes
because they realized gains from all those trades they didn't
need to make But if that brokered does get caught 00:01:26.979 --> [endTime] yeah he's toast