bucketing

Bucketing

A situation where, in an attempt to make a short-term profit, a broker confirms an order to a client without actually executing it. A brokerage which engages in unscrupulous activities, such as bucketing, is often referred to as a bucket shop.

Notes:

If the eventual price that the order is executed at is higher than the price available when the order was submitted, the customer simply pays the higher price. On the other hand, if the execution price is lower than the price available when the order was submitted, the customer pays the higher price and the brokerage firm pockets the difference

See also: Bucket Shop, Churning, Circular Trading, Execution, Front Running, Guilt Edged Investment, Jitney, Pump and Dump

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bucketing

Taking the opposite side of a customer's order into the broker's account or an account over which the broker has an interest without first putting the order out for a competitive bid.