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Crystallization

   Also found in: Dictionary/thesaurus, Medical, Encyclopedia, Wikipedia, Hutchinson 0.06 sec.
Crystallization
The act of selling and buying stocks almost instantaneously in order to increase or decrease book value.

Notes:
This is a routine method used by many investors and companies to change book values without changing beneficial ownership. An example of this occurs when an investor needs to take a capital loss for a particular stock, but still believes the stock will rise. Thus, he/she would crystallize the paper loss by selling the stock and buying it back right away.

Most tax agencies have regulations (such as the wash sale rule) to prevent taking a capital loss in this fashion.



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