What is the cross agency?

, also known as a dual agency, is an agency Cross a situation where a trade is carried out with a single agent or broker acting on behalf of the seller and the buyer. This type of business activity usually evolves when two clients operate the same broker make orders that compensate for each other. In most settings, the agent or broker will follow the usual procedures for processing these two orders and exceeding them only if there is no better offer on the business floor.

The potential for the Cross agency will take place when two different investors who work with the same broker present different orders to make shops that compensate the other. For example, one client submits an order to purchase a certain amount of security, while the other client submits the order to sell a certain amount of the same security. Usually, the limits of purchasing and sales prices will also be very similar. The broker after receiving these two orders notices that they might be exceededENY, but process orders in the usual way and announce them on the trade floor. If no acceptable offers for any order are made, then the broker can continue to exceed the two and basically complete transactions in a way that allows both clients to receive what they wanted from the store.

For brokers or agent, the occurrence of the cross agency has the advantage that it is able to collect commission from each of the two participating clients. At the same time, this particular type of transaction can often allow brokers to save both clients of any distribution that would be charged by market creators if two orders were finally made on the market. From this point of view, the event of this type of cross trade in favor of all involved may be.

In nations where the Crossing agency is considered as property and legal trading procedure, there are usually government regulations that help prevent brokersm or by agents prefer the interests of one client over another. This is one of the reasons why both orders must be transferred to a business floor and notified. This allows you to make any offers that would eventually be larger for one or both clients. Assuming Cross, assuming that they are not accepted better offers, allows both orders to be settled quickly and easily, which is usually satisfactory to the buyer and the seller.