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.
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.
Round-trip trading costs are considered before an investment decision is made.
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.