What is a Crossed Trade?
Crossed trades are buying and selling activities that are conducted without recording transactions related to the process of trading the securities involved. In most cases, the sale and purchase will involve a single security that is held by two investors. It is also highly likely that the two investors utilize the same broker to arrange the sale and purchase activity. The use of a crossed trade is not available in many markets around the world. Governmental regulations in a number of countries prohibit the use of the crossed trade. In some cases, legislation was enacted to prevent a small number of unscrupulous brokers from failing to obtain the best price for each client involved in the trading. Other countries chose to impose a ban on the crossed trade as the practice has the potential to create loopholes in tax laws and thus could be used to get around paying an equitable amount of taxes on the investments involved. In countries where a crossed trade is possible, there are usually
