wash trade


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.