RE: Afternoon/Evening2 Dec 2020 20:29
Hi C7...yes it can be rather complicated to understand or the significance of it to private investors ...
I quote this from investopedia.com. for further details..
“KEY TAKEAWAYS
A cross trade is a practice where buy and sell orders for the same asset are offset without recording the trade on the exchange. This 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.
Cross trades are permitted when brokers are transferring clients assets between accounts, for derivatives trade hedges, and certain block orders.
Concerns About Cross Trades
While a cross trade does not require each investor to specify a price for the transaction to proceed, matching orders occur when a broker receives a buy and sell order from two different investors both listing the same price. Depending on local regulations, trades of this nature may be allowed, since each investor has expressed an interest in completing a transaction at the specified price point. This may be more relevant for investors trading highly volatile securities where the value may shift dramatically in a short period of time.“
ATB