riskless transaction

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Riskless transaction

A transaction that is guaranteed a profit, such as the arbitrage of a temporary differential between commodity prices in two different markets. The evaluation of whether dealer markups and markdowns in OTC transactions are reasonable. According to NASD, markups or markdowns should not exceed 5%.

Riskless Transaction

A transaction where a gain is guaranteed by the structure of the transaction. To give a very simple example, one may find a client who wishes to purchase a security at $10 per share when one knows that the current price is $9.50 per share. One then buys the security at the current price and instantly re-sells to the client for a 50 cent per share guaranteed profit. This is also called a simultaneous transaction. See also: Arbitrage, Risk-free return.

riskless transaction

A dealer transaction in which the dealer makes a purchase or sale to offset a customer order. Thus, if a customer wishes to purchase 500 shares of Rushville Exterminators, Inc., at $80 per share, the dealer may purchase the 500 shares from another source at $79.25 and resell the stock to the customer at a markup of 75¢. The dealer has entered into a riskless transaction because the purchase will be offset by an existing customer order. The markup on riskless transactions is regulated by the National Association of Securities Dealers. Also called simultaneous transaction. See also five-percent rule.
References in periodicals archive ?
"We're pleased to have the opportunity to assist ClearChoice with their continued east coast expansion plans by securing three simultaneous transactions in the NY metro area," said Arthur Mirante, Principal, Avison Young.
Integration Key to Success: Integration risks are elevated with two simultaneous transactions, and Charter's ability to manage the integration process and limit disruption to the company's overall operations is key to the success of the transactions.
M2 EQUITYBITES-December 4, 2015-InSite Group Acquires Three US Hotels in Simultaneous Transactions
The quick payment tool ICBC e-Payment had over 60 million customers and a total transaction volume of over RMB 80 billion, 5.4 times of the same period of last year, and its capacity of handling over 10 million simultaneous transactions per second is unrivaled in the industry.
BPLO has installed a closed-circuit television system in the vicinity to ensure security for clients and a paging system that notifies taxpayers of the status of their applications while having simultaneous transactions with adjoining offices in City Hall.
They demand a new approach to data management that can handle huge data volumes and millions of simultaneous transactions.
Imagine the new phenomenon of flash fraud, where a person places 500 simultaneous transactions using a single card across multiple retailers, or one person creates 150 different cards in rapid succession at one site.
Enabling simultaneous transactions and analytics in real time on the same data set, DeepDB brings unprecedented scale, simplicity and speed to data-driven decision making at large organizations.
London, United Kingdom, April 20, 2013 --(PR.com)-- The new OS improves the transaction processing capacity of its platforms making Woodlake Commodity Solutions' OS one of the most advanced OS in the industry highly capable of handling simultaneous transactions globally.
Deepak Khullar, Chief Financial Officer of ADCB said, "The simultaneous transactions are ADCB's largest ever debt offering and includes the largest subordinated debt issue by a Middle Eastern bank ever.
Additional performance enhancements in the new release enable faster data throughput via simultaneous transactions executed across the data fabric, as well as database-like persistence, increasing the performance and reliability of in-memory data.
The ICFA jurists clearly stipulate in Resolution 179 that: "It is not permissible to execute both organized and reverse Tawarruq because simultaneous transactions occurs between the financier and the Mustawriq, whether it is done explicitly or implicitly or based on common practice, in exchange for a financial obligation.

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