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Give-up

An arrangement where one broker executes a trade and passes it to a different broker to clear and carry.

Large traders often want the best execution desk and the cheapest clearing, which are rarely the same firm. A give-up agreement lets an executing broker hand the fill to the clearing fcm that holds the account, for a per-side fee.

For retail this shows up as an extra line item when using a third-party front-end or a prop platform that routes through one firm and clears at another.

Example: a fund's futures desk executes 200 lots through a bank's algo, then gives them up to its prime FCM. The bank charges $0.20 per side execution; the FCM charges clearing and exchange fees.

Related: fcm, clearing-house, exchange-fee, round-turn, introducing-broker

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