In Finance, What is Bucketing?
As a practice that is considered by most of the financial community to be unethical, bucketing involves the attempt of a broker to use deception in order to generate investment profits for his or her personal portfolio. Essentially, bucketing involves the confirmation of an order from a client without actually executing the order on the client’s behalf. The anticipation is that the broker will be able to realize enough profit to offset the difference to the client at a future date, either due to executing the order at a later date or through profits generated on other transactions. Bucketing can take place in a couple of different ways. While all forms of bucketing involve the broker or brokers confirmation the execution of orders to the client that have not actually been completed, some forms of bucketing involve the broker executing the transaction on his or her own investment account. If the price rises, the broker realizes a profit and then belatedly executes the order for the clie
