Ann: New Assays Confirm Consistent Rhodium in Drilling, page-113

TRADING SKILLS TRADING BASIC EDUCATION
Cross Trade


By
JAMES CHEN

Updated January 23, 2021
Reviewed by
GORDON SCOTT
What Is a Cross Trade?

A cross trade is a practice where buy and sell orders for the same asset are offset without recording the trade on the exchange. It is an activity that is not permitted on most major exchanges.

A cross trade also occurs legitimately when a broker executes matched buy and a sell orders for the same security across different client accounts and reports them on an exchange. For example, if one client wants to sell and another wants to buy, the broker could match those two orders without sending the orders to disallowed to be filled but filling them as a cross trade and then reporting the transactions after the fact but in a timely manner and time-stamped with the time and price of the cross. These types of cross trades must also be executed at a price that corresponds to the prevailing market price at the time.