DEFINITION of ‘Jitney’
- A situation in which one broker who has direct access to a stock exchange performs trades for a broker who does not have access.
- A fraudulent activity in the penny stock market involving two brokers trading a stock back and forth to rack up commissions and give the impression of trading volume.
BREAKING DOWN ‘Jitney’
- For example, a small firm whose volume of business is not sufficient enough to maintain a trader on the exchange would give its orders to a large dealer for execution.
- Jitney, or “the jitney game,” is basically the same thing as circular trading. The term originated from “Jitney buses,” which was a derogatory slang term for Ford buses at the beginning of the century. A reporter coined the term by alluding to the five-cent piece it cost back then for a bus ride. It has since been used to refer to something that is cheaply and poorly made.