Upstairs Trade

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DEFINITION of 'Upstairs Trade'

A buy or sell transaction for an exchange-listed stock that is not executed through an exchange. The upstairs trade is executed with different terms and pricing than would be available through the exchange. Some exchanges do not allow upstairs trading. The trade does not occur on the trading floor but in a separate location.

INVESTOPEDIA EXPLAINS 'Upstairs Trade'

Upstairs trading, along with trading by dark pools and market makers, is a type of off-board trading. Off-board trading is criticized for allegedly depressing a security's public price as available through an exchange. In 2010, 30% of U.S. equities trading was off-board. These types of trades are typically large transactions that may be kept off the floor to avoid large price impacts or front running.

RELATED TERMS
  1. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  2. Over-The-Counter - OTC

    A security traded in some context other than on a formal exchange ...
  3. Listed Security

    A financial instrument that is traded through an exchange, such ...
  4. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  5. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
  6. Significant Order

    An order to buy or sell a security that, due to its abnormally ...
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