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 ?
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.
CMS, a utility holding company, is currently under scrutiny by the Securities and Exchange Commission for so-called "round-trip trading."