Introduction

A cross trade is a practice where a broker buys and sells the same stock at the same price for security are offset without recording the trade on the exchange. That means the broker simultaneously makes trade between two separate customers at that price. It is not permitted on most of the exchanges. Another variant of this is the market opening and closing crosses. Cross is also used with regard to securities trades and refers to a type of foreign exchange trade. The NASDAQ collects data on all buy and sell interests within the two minutes before its opening this information collected is referred to as the opening cross. Traders can post orders to buy at the opening price or to buy if there is an order imbalance. This dissemination of pricing interest helps to limit disruptions in liquidity.