An order received to buy and an order to sell the same stock at the same price by a broker, in which event he might let one order offset the other and not fill them upon the exchange at all. It is contrary to the rules, however.
Suppose Jones & Co. receive an order to sell 100 shares of a given stock at 90; at the same time they receive an order for the purchase of a like amount of the same stock at the same price. All transactions by a member of the stock ex- change, in what are known as stock exchange securities, must be made on the floor of the exchange, and the quotations made. It would be perfectly proper for Jones & Co. to "match up," as it were, the purchase of this stock against its sale, provided that there was no other like amount of the same stock offered at a lesser, or bid for at a higher, price on stock exchange than 90. In actual practice, the broker goes to that part of the exchange where the particular stock is dealt in, and declares to the other brokers that " I will take to myself 100 shares of - stock at 90, if there are no objections." Then if no bids or offers are made as above suggested, the final results would be that the 100 shares belonging to Jones & Co.'s customer who gave the selling order, would be transferred into the hands of the other client who had given the purchasing order, each paying Jones & Co. a commission, the matter being actually consummated on the floor of the stock exchange, and the prices made public through the usual channels. This is commonly called " crossing stocks." (See also " Matched Orders.")