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Exchange Distribution Meaning & Definition

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Definition of Exchange Distribution

Exchange Distribution is a distribution of a large block of stock on the floor of the exchange that is crossed with offsetting orders.

Applying "Exchange Distribution" to Securities Exams:

An exchange distribution often takes place when a significant shareholder wants to sell their position in a security. The exchange distribution will be handled by a member firm. During the course of the distribution the firm may call its large clients to measure their interest in purchasing a portion of the block of stock. The floor broker with the cross the stock with the approval of the designated market maker (specialist)

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