DK

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DK
/diː keɪ/ (v.)

To disown, deny, or feign ignorance, Saint Peter-style. Of a prime broker, to reject a transaction that an executing broker attempts to give up to it on behalf of one of its clients.

“DK” stands not, as the JC believed in some humiliating mondegreen until 2021, for “drop-kick”, but for “don’t know”. As in, “I do not, biblically, know this transaction”. To “DK” a trade “alleged” by an executing broker to a prime broker, is to refuse to take it, as is sometimes required by the SEC no-action letter.

You might also describe the behaviour of a cherry-picking bankruptcy administrator as DKing a trade. But this doesn’t happen as often as you would think, given how much money and time people spend worrying about it.

See also

• Automatic Early Termination
• Netting
• SEC no-action letter