Matched Trade Law and Legal Definition

Matched trade refers to a trade that is reflected by an equal and offsetting trade with a different counterparty. In a matched trade, the interest rate, market, and price risks are offset but not the credit risk.

A matched trade takes place when a person buys or sells a stock, with knowledge that a substantially offsetting transaction is going to be entered into by someone, in order to mislead others about the extent of the activity in, or the market for, a given stock. [SEC v. Kwak, 2008 U.S. Dist. LEXIS 10201 (D. Conn. Feb. 12, 2008)].