What is dual trading?
Dual trading concerns a broker who buys or sells shares or investment for a customer, acts as an agent, but also buys or sells shares on the same day. Opponents of double trading claim to have the potential for abuse and for illegal or unethical business opportunities. However, those who are in favor of this suggest that personal shops brokers are important for everyday purchase and sale.
As a financial term, dual trading usually concerns the actions of those individuals involved in the stock exchange or similar market. The basic idea behind it is located in the department between the potential roles of the broker: which are an agent and seller. As an agent, the broker is expected to represent others and buys or sells shares and other investments depending on what is best for those he represents. However, traders buy and sell shares for themselves or for the groups of which are part of which, which means they have no obligation to others.
dual trading occurs whenThe broker works as an agent and a seller within a single market or working day. Opponents of this practice usually argue that such trading creates opportunities for abuse of brokers who can use information obtained through the sale of agents so that traders can be used. In many countries, there are laws regulating dual trading, and in the US it is illegal unless the broker touches certain conditions. Some markets may be more open for such trading, but opponents of practice believe that it has no own advantages for clients of a broker or market in general.
However, those who are for dual trading claim that this is an important aspect of different markets and that dealers are often necessary. These supporters claim that dealers' shops are the main part of market activities on a given day. If the brokers have been limited to the Condupate or the seller every day, the supporters claim, then market activity would be significantly reduced, which damages markets and economics in general. TVIt also rushes that the abuse of dual trading is a threat rather than a reality and that most brokers are able to do what is best for themselves and their clients without conflict of interest.