Round-Trip Trading

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Round-Trip Trading

The act or practice of two or more companies trading assets or securities back and forth at approximately the same price. For example, Company A may sell securities to Company B and agree to buy them back at the same price at a later time. Round-trip trading creates the impression of a high trading volume, suggesting interest in assets or securities that may not actually be there. It also increases a firm's earnings and expenses without increasing or decreasing its net income. It is a form of market manipulation. See also: Churning.
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NASDAQ's own iNet platform, and NYSE's Arca system, are two of the fastest in the world with round trip trading latencies around the 100 microsecond mark.