Round-Trip Trading

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.
References in periodicals archive ?
Round-trip trading refers to the practice whereby two companies buy and sell the same amount of power at the same price and at the same time, resulting in a financial "wash" for both companies.
The pressure to boost revenue in what was to be a highly profitable venture led to cheating in its natural gas trading volumes called round-trip trading They weren't alone.
Nymex had charged the company with ten separate counts, including engaging in round-trip trading, and in conduct that was detrimental to the exchange.
attorney request documents and information about Duke's trading activities, including so-called round-trip trading.
The optimization project reduced PIPE Velocity round-trip trading latency between Chicago and New York by 2 milliseconds and was prompted by increased demand from clients to trade Chicago markets from the New York Metro area.
CMS Energy's vice chairman and general counsel, said the settlement, which remains subject to court approval, represents another milestone in the Company's ongoing efforts to resolve the legal issues stemming from a subsidiary's round-trip trading.
Round-trip trading costs are considered before an investment decision is made.
In a news release issued today, the SEC said it has filed an action against three individuals relating to round-trip trading by CMS MST.
Recently, CMS reached a settlement agreement with the Commodity Trading Futures Commission (CFTC) for $16 million related to allegations of round-trip trading activities in its energy and marketing segment during 2000 and 2001.
TransAlta contends that no round-trip trading occurred between Reliant Energy Inc.
CMS Energy announced today the completion of the work of a Board of Directors special committee established to investigate round-trip trading at CMS Marketing, Services and Trading.
In particular, there is widespread doubt about the accuracy or relevance of mark-to-market (MTM) accounting, while revelations of round-trip trading have further undermined investor confidence.