Wash tradehttps://en.wikipedia.org/wiki/Wash_trade
Wash trading is a form of market manipulation in which an entity simultaneously sells and buys the same financial instruments, creating a false impression of market activity without incurring market risk or changing the entity's market position. Wash trading has been deemed illegal in most jurisdictions. Various practitioners engage in wash trading for several reasons. Some examples include:
- Artificially inflating trading volume gives the impression that the financial instrument is more in demand than it actually is.[6]
- Falsely driving up asset prices by fabricating trade history with increasing prices, particularly in illiquid assets.[4]
Several prevalent wash trading practices include:
- Engaging in self-trading by placing bid/ask orders and subsequently filling them, which is particularly effective in low-liquidity assets