Wednesday, November 27, 2013

DUAL TRADING

When a broker simultaneously executes customer orders and places trades in his or her own account, or one in which he or she has a beneficial interest, on the same trading day. This is also known as acting as both an agent and a dealer at the same time. Dual trading is prevalent in the futures market. Dual trading is a very controversial issue. Proponents say that when brokers are able to trade in their own accounts as well as those of their customers, they contribute to market performance and liquidity because personal broker trades make up a large portion of trading volume....
On the other hand, opponents say that banning dual trading would not affect market liquidity, and would eliminate unlawful trading by removing any conflicts of interest.

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