Bucketing

AAA

DEFINITION of 'Bucketing'

A situation where, in an attempt to make a short-term profit, a broker confirms an order to a client without actually executing it. A brokerage which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.

INVESTOPEDIA EXPLAINS 'Bucketing'

If the eventual price that the order is executed at is higher than the price available when the order was submitted, the customer simply pays the higher price. On the other hand, if the execution price is lower than the price available when the order was submitted, the customer pays the higher price and the brokerage firm pockets the difference

RELATED TERMS
  1. Execution

    The completion of a buy or sell order for a security. The execution ...
  2. Jitney

    A situation in which one broker who has direct access to a ...
  3. Circular Trading

    A fraudulent trading scheme where sell orders are entered by ...
  4. Churning

    Excessive trading by a broker in a client's account largely to ...
  5. Front Running

    The unethical practice of a broker trading an equity based on ...
  6. Cross Trade

    A practice where buy and sell orders for the same stock are offset ...
RELATED FAQS
  1. What is the benefit of the Modified Internal Rate Of Return (MIRR)?

    The modified internal rate of return (MIRR) is a financing metric used in business capital budgeting. Its primary benefit ... Read Full Answer >>
  2. Why is the Modified Internal Rate Of Return (MIRR) preferable to the regular internal ...

    Even though the internal rate of return metric is popular among business managers, it tends to overstate the profitability ... Read Full Answer >>
  3. Who sets the guidelines for accounting principles?

    While the generally accepted accounting principles (GAAP) are not a strict requirement of all U.S. corporations, the guidelines ... Read Full Answer >>
  4. Which US cities have the highest number of high-income households?

    According to the most recent U.S. Census report on the geographic concentration of high-income households conducted in 2 ... Read Full Answer >>
  5. What happens when a company defaults on its commercial paper obligations?

    As a practical matter, the Issuing and Paying Agent, or IPA, is responsible for reporting the commercial paper issuer's default ... Read Full Answer >>
  6. How can I calculate compounding interest on a loan in Excel?

    Compound interest is the amount of interest on a principal amount, along with the accumulated interest on the principal from ... Read Full Answer >>
Related Articles
  1. Economics

    Online Investment Scams Tutorial

    To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic.
  2. Personal Finance

    4 Dishonest Broker Tactics And How To Avoid Them

    Protecting yourself from unscrupulous practices means knowing how to spot them.
  3. Investing

    Fee-Based Brokerage: Will They Work For You?

    Learn the pros and cons of this type of investing and whether it will work for you.
  4. Professionals

    Are Stock Buybacks Always Good for Shareholders?

    Stock buyback programs aren't always done with the interests of shareholders in mind. It's important to try to understand the motivation behind such moves.
  5. Professionals

    Why Women Choose Women for Financial Advice

    Women often prefer female financial advisors because client and advisor can relate to each other on a variety of levels.
  6. Economics

    Understanding Implicit Costs

    An implicit cost is any cost associated with not taking a certain action.
  7. Investing Basics

    Do You Know These Odd Investing & Business Terms?

    Think investment talk is boring? There are plenty of terms to liven up any conversation about Wall Street and finance. You should try some of them out.
  8. Professionals

    How Financial Advisors Lose Clients

    Being a financial advisor isn't easy, but your chance of success is much higher if you avoid the most common mistakes that lead to client attrition.
  9. Professionals

    Finding a Top Financial Advisor in Canada

    Choosing a financial advisor is a difficult and important job. A ranking of Canadian advisors can help you make the right decision.
  10. Economics

    What Does Finance Cover?

    Finance is the study of banking, leverage, credit, capital markets, money and investments, along with how they are used by individuals and companies.

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!