InvestorsHub Logo

MoneyMaker20

03/31/15 4:33 PM

#4590 RE: Alleywolf #4589

For sure. Someone indeed sold 10M but someone also indeed bought 10M. AON orders don't show up on L2 and the trade was made at .0008 when the bid was .0007 and the ask was .0009, so it's grey bc it wasn't considered a buy or sell, but an even trade between two people.

lottotix

03/31/15 4:35 PM

#4591 RE: Alleywolf #4589

LOL did that help? Here you go:
DEFINITION of 'Cross Trade'

A practice where buy and sell orders for the same stock are offset without recording the trade on the exchange, which is outlawed on most major stock exchanges. This also occurs when a broker executes both a buy and a sell for the same security from one client account to another where both accounts are managed by the same portfolio manager.

INVESTOPEDIA EXPLAINS 'Cross Trade'

Typically, this is yet another way for a broker to rip you off. When the trade doesn't get recorded through the exchange, there is a good chance that one client didn't get the best price.

However, cross trades are permitted in very selective situations such as when both the buyer and the seller are clients of the same asset manager. The portfolio manager can effectively "swap out" a bond or other fixed income product from one client to another and eliminate the spreads on both the bid and ask side of the trade. The broker and manager must prove a fair market price for the transaction and record the trade as a cross for proper regulatory classification.

The key point is that the asset manager must be able to prove to the SEC that the trade was beneficial to both parties before executing a cross trade.

http://www.investopedia.com/terms/c/crosstrade.asp

AON- all or none- the entire order executes or else none at all- meaning no "partial" fills