Define: Bucketing

Bucketing is a practice where a broker or financial advisor groups client orders together and executes them at a later time, often resulting in a less favorable price for the client.

Bucketing is not necessarily illegal, but it can be considered unethical and a violation of a broker’s fiduciary duty to act in the best interest of their clients.

It can be difficult to tell if your broker is bucketing your orders, but some red flags include consistently poor execution prices and a lack of transparency about the execution process.

It may be possible to sue a broker for bucketing orders if it can be proven that the broker breached their fiduciary duty or engaged in fraudulent behavior.

Bucketing can result in investors receiving less favorable prices for their trades, which can ultimately lead to lower returns on their investments.

Yes, there are regulations in place to prevent bucketing, including the SEC’s Rule 10b-10 and FINRA’s Best Execution Rule.

Investors can protect themselves from bucketing by working with reputable brokers who prioritize transparency and best execution practices.

Yes, bucketing can occur in other industries where there is a delay between the time an order is placed and the time it is executed.

Bucketing involves grouping client orders together and executing them at a later time, while front-running involves a broker or trader using knowledge of a client’s order to make trades for their own benefit before executing the client’s order.

If you suspect your broker is bucketing your orders, you should speak with them directly and ask for more transparency about the execution process. If you are not satisfied with their response, you may want to consider working with a different broker or filing a complaint with regulatory authorities.