how an axe is used in practice
the term axe can be used in many different ways which makes the context of the conversation important to consider suppose that a trader has a large position in a given security if that trader shops around for quotes with the intent of selling the stake the trader who provides the quote may be at a disadvantage if they are unaware that the first trader has an axe with regard to the security the second trader may ask do they have an axe on this security which means do they have plans to sell this security traders may also use the term to represent securities related to the securities that they hold for instance a trader may hold a long position and have an axe toward put options if nervous about the stock s short term prospects having an axe is often kept secret because knowledge of that information can be used by other market participants to exploit the situation for their own gain and at the expense of the axe holder that said traders with good rapport may ask each other outright if they have a particular axe in the hopes that the other trader s axe s will be opposite from their own this way they can affect a trade or trades with each other in a mutually beneficial manner 