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.

BREAKING DOWN '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.

  1. Upstairs Market

    The trading of securities, such as stocks, that occurs within ...
  2. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable ...
  3. Trading Floor

    The floor where trading activities are conducted. Trading floors ...
  4. Exchange

    An exchange is a marketplace in which securities, commodities, ...
  5. 19c3 Stock

    Any stock listed on an equity exchange after April 26, 1979. ...
  6. Equity Market

    The market in which shares are issued and traded, either through ...
Related Articles
  1. Trading

    High-Frequency Trading: A Primer

    An in depth look at how high-frequency trading works and who the players are.
  2. Insights

    Should You Be Afraid Of Dark Pool Liquidity?

    Don't fear the deep end. Dark pool liquidity can help drive down stock cost for everyday investors.
  3. Insights

    An Introduction to Dark Pools

    Dark pools are an ominous-sounding term for private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public.
  4. Tech

    The Number Of Dark Pools In Cryptocurrency Trading Is Increasing

    Dark pools, which conduct trades away from cryptocurrency exchanges, are increasing in crypto trading.
  5. Investing

    Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
  6. Trading

    The Global Electronic Stock Market

    The way trading is conducted is changing rapidly as exchanges turn toward automation.
  7. Investing

    How Nasdaq Continues To Innovate

    For centuries, a stock market was a physical arena where buyers and sellers traded shares. Then the NASDAQ opened and changed everything.
  8. Tech

    5 Live Bitcoin Exchanges

    Learn about five of the largest bitcoin exchanges operating around the world in 2015, and discover the issues these exchanges are facing.
  9. Financial Advisor

    Asset Manager Ethics: Placing and Managing Trades

    Five guidelines have been created to assist asset managers on the best practices for placing and managing trades in client accounts.
  1. 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 >>
  2. Can stocks be traded on more than one exchange?

    A stock can trade on any exchange on which it is listed. If it chooses to do so, a company can list its shares on more than ... Read Answer >>
  3. What are the historical beginnings of the securities industry?

    Learn the history of securities trading, beginning in 12th century France and leading to world financial market centers in ... Read Answer >>
  4. What kind of assets can be traded on a secondary market?

    Learn about the difference between the primary market and the secondary market, and what types of assets are traded on secondary ... Read Answer >>
  5. Why do option volume quotes differ on different websites?

    Option quotes are different in price and in volume because identical options can trade on more than one market or exchange. ... Read Answer >>
Hot Definitions
  1. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  2. 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 ...
  3. Entrepreneur

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

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

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

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
Trading Center