What is a 'Cross' trade?

A 'Cross' trade occurs when a broker (not to be confused with a brokerage) executes buy and sell orders for the same asset across different client accounts and then reports them on an exchange.

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In simpler terms...

Your client, Jack, is interested in going long 1,000 call contracts of stock ABC.
You have another client, Jill, who is interested in shorting 1,000 of the very same contracts for stock ABC.

As the broker you are able to match these two parties and execute a 'Cross' trade on their behalf.
Jack's order for 1,000 long calls and Jill's order for 1,000 short calls would not be sent to any stock exchange to be filled but would instead be filled by the broker.

This type of trade must be executed at a fair market price.

You will see these transactions marked by the text 'Cross' in the 'Flags' column on the Unusual Whales Flow feed.

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'Cross' trades are identified via the Flag column. Yes, this one was for a singular contract!

Given that the two parties involved in a 'Cross' trade have been matched up and have mutually agreed to enter into the corresponding long/short positions these trades offer very little to a trader looking to determine bullish or bearish flow.

Consider how the sentiment would differ between a cross trade, where 2 parties agree to be matched in a 1,000 contract trade, and an individual 'sweeping' 1,000 contracts on the open-market.

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