Wash trade


A wash trade is a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading, artificial activity in the marketplace. First, an investor will place a sell order, then place a buy order to buy from themself, or vice versa. This may be done for a number of reasons:
Some exchanges now have protections built in, sometimes mandatory for participants, such as STPF on the Intercontinental Exchange.
Wash trading has been illegal in the United States since the passage of the Commodity Exchange Act, of 1936.