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The practice where customer trades are executed internally within a brokerage or through intermediaries rather than through an exchange.

The brokerage keeps any money it may make on the spread (the difference between the purchase price and the sale price).


A reduction in the collateral needs of a broker, resulting from the presence of both long and short client positions.


Netting of transactions within a group of businesses, thereby reducing the number and cost of external transactions.

Also written 'internalisation'.

See also