DEFINITION of 'Ginzy Trading'

In floor trading, the practice of selling part of an order at the offer price and the remainder to the same broker at the lower bid price. Ginzy trading was originally performed primarily to achieve an average price for the customer which is within the predefined increments, or "ticks," in which the market is traded.

BREAKING DOWN 'Ginzy Trading'

Ginzy trading is generally considered unethical and the practice is unlawful if such a trade is caused by collusion among brokers. Exchange rules typically require that brokers seek to get the best price possible for their customers and that they make all trades on the open market. The need for a Ginzy trade has declined as exchanges have decreased tick sizes from the 1/8th of a dollar ticks seen in the past down to the one cent ticks that many instruments trade in today. Increased use of electronic and over the counter order matching systems also help to prevent illegal trades.

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RELATED FAQS
  1. What is Ginzy trading?

    Ginzy trading is an order of different prices placed by a floor broker. It occurs when a floor broker attempts to avoid an ... Read Answer >>
  2. What is the difference between pips, points, and ticks?

    Learn the differences between points, ticks and pips and how each are used by investors to measure price changes in stocks, ... Read Answer >>
  3. What exactly is being done when shares are bought and sold?

    Most stocks are traded on physical or virtual exchanges. The New York Stock Exchange (NYSE), for example, is a physical exchange ... Read Answer >>
  4. Why are traders on the floor of the exchange?

    Before the advent of electronic trading platforms, the floor of the stock exchange was the location for market transactions ... Read Answer >>
  5. Does a broker always have to buy a stock if I want to sell it?

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    Read a brief overview of how to open a brokerage account, how to buy and sell stock, and the different kinds of trade orders ... Read Answer >>
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