What is "interpositioning" in trading?

Interpositioning refers to the practice of adding another broker or intermediary to a transaction, which is often done to earn additional commissions. This can occur when a broker executes an order by routing it through another broker, which can create added costs for the client without providing any real benefit. It is important to note that this practice may not always be in the best interest of the customer, as it can lead to higher costs and potentially affect the execution price of the trade.

While other options present actions related to trading, they do not capture the essence of interpositioning. For example, placing customer orders at inflated prices doesn't represent the nuanced action of adding a broker, and trading on insider information is strictly illegal and governed by different regulations. Executing trades without customer consent describes unauthorized trading, which is also a serious violation but not directly related to the act of interpositioning itself. Thus, the best fitting definition of interpositioning among the choices is the addition of another broker to a transaction for the purpose of earning commissions.