What does 'Give Up' mean

Give up is a procedure in securities or commodities trading where the executing broker places a trade on behalf of a second broker as if the second broker actually executed the trade. This is usually done because a broker cannot place a trade for a client based on other workplace obligations. To ensure the trade is executed in a timely fashion, a request is made of another broker to place the trade on behalf of the first broker.

BREAKING DOWN 'Give Up'

On the record books, the trade shows the information for the client's broker, not the executing broker. Thus, the broker of the client and the broker on the other side of the trade receive the commission, while the executing trader gets nothing. The process is referred to as a give up because the trader who executes the trade gives up the associated credit for the purchase or sale; the executing trader also gives up the associated commission.

The act of performing a trade in the name of another broker is generally considered a professional courtesy. In regards to the reimbursement of a broker for services rendered, the payment of services associated with a give up functions within an area that is not clearly defined.

Parties Involved in the Trade

While a standard trade often involves two parties – the buying broker and the selling broker – a give up involves at least one other person who executes the trade on the behalf of one of the two aforementioned brokers. In cases where both the original buying and selling brokers are otherwise obligated, it is possible for a fourth party to become involved if the buying broker and the selling broker each ask separate traders to act on their behalf. This would result in a give up on the selling side and on the buying side.

Example of a Give Up Scenario

Broker X gets a buy order from a client but is currently indisposed. To place the trade in a timely fashion, Broker X asks Floor Broker Y to place the order in his place. Broker Y then buys the stock on behalf of the client of Broker X.

Although Floor Broker Y places the trade, he must give up the transaction and record it as if Broker X placed the trade, since the trade was conducted on behalf of the client of Broker X. Thus, the transaction is recorded as if Broker X made the trade, even though Floor Broker Y executed the trade.

RELATED TERMS
  1. Executing Broker

    The broker or dealer that finalizes and processes an order on ...
  2. Two Dollar Broker

    A floor broker who executes orders for other brokers who cannot ...
  3. Carrying Broker

    A commodities or securities broker who provides back office functions ...
  4. Each Way

    A slang phrase used when a broker earns commissions from both ...
  5. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
  6. Forex Broker

    Firms that provide currency traders with access to a trading ...
Related Articles
  1. Investing

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  2. Investing

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one.
  3. Trading

    Is Your Forex Broker A Scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  4. Trading

    Broker Or Trader: Which Career Is Right For You?

    A day in the life of a broker or trader is an exciting and varied one. Find out how to decide between these two financial professions.
  5. Financial Advisor

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  6. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
  7. Trading

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  8. Investing

    What Does a Broker Do?

    In the investment world, broker is a term used to refer to an individual or entity that helps facilitate trading in financial securities.
  9. Investing

    Why Use a Discount Broker?

    A discount broker is a stockbroker that does not offer clients investment advice, but trades shares for a smaller commission than a full-service broker.
  10. Personal Finance

    Research Report Red Flags For Brokers

    Discover how to look past analysts' ratings to find winning stocks for your clients.
RELATED FAQS
  1. I'm new to this. Can I sell or buy stock by myself?

    In order to buy stocks, you need the assistance of a stock broker since you cannot just phone up a company and ask to buy ... Read Answer >>
  2. How does an insurance broker make money?

    Discover how an insurance broker makes money. Insurance brokers are important in helping people find the right insurance ... Read Answer >>
  3. Does a broker always have to buy a stock if I want to sell it?

    There are certain times when a broker must purchase the stock that you are selling. For example, if the broker is a market ... Read Answer >>
  4. There are so many stockbrokers out there. How do I go about choosing the best one ...

    If you decide that you have the knowledge and experience to take on stock investing, or if you feel you would like to give ... Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center