Dual Trading


DEFINITION of '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.

BREAKING DOWN 'Dual Trading'

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.

  1. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  2. Liquidity

    The degree to which an asset or security can be quickly bought ...
  3. Dealer

    A person or firm in the business of buying and selling securities ...
  4. Chicago Board Options Exchange ...

    Founded in 1973, the CBOE is an exchange that focuses on options ...
  5. Front Running

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

    1. An individual or firm that places securities transactions ...
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