riskless transaction investment & finance definition

A dealer transaction in which the dealer makes a purchase or sale to offset a customer order. Thus, if a customer wishes to purchase 500 shares of Rushville Exterminators, Inc., at $80 per share, the dealer may purchase the 500 shares from another source at $79.25 and resell the stock to the customer at a markup of 75¢. The dealer has entered into a riskless transaction because the purchase will be offset by an existing customer order. The markup on riskless transactions is regulated by the National Association of Securities Dealers. Also called simultaneous transaction. See also five-percent rule.