Circular Trading

AAA

DEFINITION of 'Circular Trading'

A fraudulent trading scheme where sell orders are entered by a broker who knows that offsetting buy orders, the same number of shares at the same time and at the same price, either have been or will be entered.

INVESTOPEDIA EXPLAINS 'Circular Trading'

These trades do not represent a real change in the beneficial ownership of the security.

RELATED TERMS
  1. Guilt-Edged Investment

    An unethical investment that generates profits for the investor. ...
  2. Pump And Dump

    A scheme that attempts to boost the price of a stock through ...
  3. Bucketing

    A situation where, in an attempt to make a short-term profit, ...
  4. Bucket Shop

    1. A fraudulent brokerage firm that uses aggressive telephone ...
  5. Churning

    Excessive trading by a broker in a client's account largely to ...
  6. Cross Trade

    A practice where buy and sell orders for the same stock are offset ...
Related Articles
  1. Online Investment Scams Tutorial
    Economics

    Online Investment Scams Tutorial

  2. What Is A Pyramid Scheme?
    Active Trading

    What Is A Pyramid Scheme?

  3. 4 Dishonest Broker Tactics And How To ...
    Personal Finance

    4 Dishonest Broker Tactics And How To ...

  4. Identity Theft: Who To Call For Help
    Credit & Loans

    Identity Theft: Who To Call For Help

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center