Out Trade

DEFINITION of 'Out Trade'

A trade that cannot be cleared by the associated exchange clearing house because of discrepancies between the data submitted by both parties on the opposite sides of a transaction.

BREAKING DOWN 'Out Trade'

When an out trade occurs, it is returned to the two parties affected in order to have the inconsistency reconciled. Should the matter be resolved, the trade is resubmitted to the clearing house. If the matter cannot be resolved, it is then forwarded to the appropriate exchange committee for dispute settlements.

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