Each Way

In trading, the term each way denotes an arrangement in which a broker earns brokerage fees off both the seller and the buyer in a securities transaction.

This can happen when both the buyer and the seller of an asset use the same broker. In an each way arrangement, the broker charges the seller a fee for brokering the sale of their assets and the buyer a fee for brokering the purchase of the desired assets.

Each way arrangements are prohibited or restricted in some jurisdictions because they can lead to a conflict of interests. The reason for this is that the prospect of double earnings gives brokers an incentive to accept offers from their own clients to fill orders placed by their own clients – rather than filling orders with the best possible offers.

In a standard arrangement, a broker fills an order from their client with the best available bid or offer they can find. The broker earns just one brokerage fee for the purchase or sale.

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