Dictionary of Finance and Investment Terms: give up
give up
- term used in a securities transaction involving three brokers, as illustrated by the following scenario: Broker A, a floor broker, executes a buy order for Broker B, another member firm broker who has too much business at the time to execute the order. The broker with whom Broker A completes the transaction (the sell side broker) is Broker C. Broker A "gives up" the name of Broker B, so that the record shows a transaction between Broker B and Broker C even though the trade was actually executed between Broker A and Broker C.
- another application of the term: A customer of brokerage firm ABC Co. travels out of town and, finding no branch office of ABC, places an order with DEF Co., saying he is an account of ABC. After confirming the account relationship, DEF completes a trade with GHI Co., advising GHI that DEF is acting for ABC ("giving up" ABC's name). ABC will then handle the clearing details of the transaction with GHI. Alternatively, DEF may simply send the customer's order directly to ABC for execution. Whichever method is used, the customer pays only one commission.
