wash trade


Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.
Related to wash trade: wash sale, Painting the tape, Cross Trade, Front running

Wash

A situation in which the profit on one activity or investment equals the loss on another. When an investment is a wash, it is said to break even.

wash trade

A transaction designed to make it appear that a purchase and sale has occurred even though no change in ownership occurred. For example, an investor might simultaneously buy and sell shares in one company through two different brokerage firms in order to create the appearance of substantial trading activity that will draw in other investors. Wash trades are illegal.
References in periodicals archive ?
htm) Spencer told investors : "We haven't found any wash trades that we've been involved in.
At least 30 so-called wash trades went undetected between September 2008 and August 2009, according to the FSA.
Nine of the wash trades made between September 2008 and August 2009 generated more than 170,000 pounds fees to reward one broker for helping UBS.