The term "cross" has two definitions in finance. The first type of cross is when a broker receives a buy and sell order for the same stock at the same price, and subsequently makes a simultaneous trade between two separate customers at that price. Variations of this are the market opening and market closing crosses. The second type of cross is a foreign exchange transaction in which the non-U.S. currencies being traded are exchanged directly for each other instead of first being converted to U.S. dollars.


"Cross" is used several ways with regard to securities trades and also refers to a type of foreign exchange trade.

Cross by Broker

If a stockbroker receives separate orders to buy and sell at the same price at the same time, he must offer the stock in the market at a higher price than the bid. If no higher bid is available, he can execute the two deals at the same time and at the same price.

Opening and Closing Crosses

The Nasdaq gathers and posts data on all buy and sell interest in the two minutes prior to its opening; this information is referred to as the opening cross. Traders can post orders to buy at the opening price or to buy if there is an order imbalance. This dissemination of pricing interest helps to limit disruptions in liquidity.

The closing cross on Nasdaq matches bids and offers in a given stock to create a final price of the day. Traders can place orders that can be either "market at close," which means buy or sell at the official closing price or "limit at close." In the latter case, if the price at the close is better than the specified limit, the deal will be executed at the market price. Nasdaq collects data for the closing cross between 3:50 p.m. and the closing time of 4:00 p.m. Cross orders are executed between 4:00 p.m. exactly and five seconds after 4:00 p.m.

Currency Cross

The dollar is the most actively traded currency in the multi-trillion dollar daily foreign exchange market. In the past, investors or hedgers who wanted to trade a pair such as the euro vs. the yen, known as EURJPY, needed to do it through the dollar. This meant that buying EUR and selling JPY required the following steps: (1) buy EUR and sell USD and (2) buy the same amount of USD and sell JPY. Disadvantages of this approach include paying the bid/offer spread twice (once in each currency pair) and needing to deal for a USD amount rather than a EUR or JPY amount. However, the dollar pairs are more actively traded than the cross, so in times of volatility or reduced liquidity, traders may still execute via the components.

The most actively traded currency crosses are the euro vs. the yen, British pound and Swiss franc. Cross trades can be done for spot, forward or options transactions.

  1. Cross Currency

    A cross currency is a currency rate that is quoted and transacted ...
  2. Cross Rate

    A cross rate is the exchange rate between two currencies when ...
  3. Imbalance Only Orders (IO)

    Limit orders that provide liquidity during the opening cross ...
  4. Crossed Check

    A crossed check is a check that is crossed with two parallel ...
  5. Agency Cross

    An agency cross is a transaction in which an investment adviser ...
  6. Net Order Imbalance Indicator (NOII)

    Order imbalance information about the opening and closing crosses ...
Related Articles
  1. Investing

    Forex Investing: How To Use The Golden Cross

    Many currency traders know about the golden cross, but most don't utilize it. Learn how you can profit from this FX trend indicator.
  2. Trading

    What's a Death Cross?

    A death cross is seen when the short-term moving average of a security or index falls below its long-term moving average.
  3. Investing

    The Closing Cross: How Nasdaq Stock Prices Are Set

    When you hear that your favorite stock closed at a record high price, have you ever considered how that price was reached? The calculation effort is far more complex than you might expect. To ...
  4. Trading

    These Are The Best Hours To Trade the U.S. Dollar (USD)

    The best times to trade USD currency pairs are centered before and after economic releases in in the U.S. and cross-venues.
  5. Trading

    The Best Hours To Trade The Swiss Franc

    Diverse reporting schedules keeps Swiss franc forex markets active and liquid between midnight and noon U.S. Eastern Time.
  6. Investing

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  7. Investing

    The Opening Cross: How Nasdaq Stock Prices Are Set

    Learn how the opening cross auction process determines prices of Nasdaq-listed securities at market open to ensure liquidity by matching buyers and sellers.
  1. What is the difference between a Golden Cross and a Death Cross Pattern?

    Learn the difference between the golden cross and the death cross, both of which are considered important technical indicators ... Read Answer >>
  2. How can traders profit from a death cross pattern?

    Seek long-term profits by using the death cross pattern to identify either a trading entry point or a major resistance level ... Read Answer >>
  3. What does it mean when an index or stock exhibits a death cross?

    Find out what it means when an index, stock or exchange exhibits a death cross pattern between its short-term and long-term ... Read Answer >>
  4. How effective is creating trade entries after spotting a Golden Cross pattern?

    Explore the components of the golden cross pattern for elements of effective trading strategy based on this pattern, including ... Read Answer >>
  5. How do I build a profitable strategy when spotting a Golden Cross pattern?

    Learn the primary trading strategies that traders and market analysts employ when they have identified the occurrence of ... Read Answer >>
  6. How are moving averages used in trading?

    Moving averages are very popular tools used by technical traders to measure momentum. The main purpose of these averages ... Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center