Glossary · Operations
Trade Break
A trade break is a mismatch between two records of the same trade, such as the manager’s booking and the broker’s confirmation, that must be resolved before settlement.
A trade break occurs when details of a trade differ between the parties or systems that record it. Typical fields that break include quantity, price, trade date, settlement date, security identifier, account, commission and fees, or the trade may be missing entirely on one side.
Trade breaks matter because unresolved breaks become settlement fails, cash and position differences, and ultimately NAV errors. Breaks are usually identified during trade confirmation and matching in the middle office on trade date, when they are cheapest and fastest to fix.
Pitfalls include breaks caused by inconsistent reference data, such as a wrong settlement instruction or security mapping, that recur until the root cause is corrected; manual allocation of block trades; and breaks that are aged without escalation. A good process logs every break with a category, owner and resolution note.
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