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I mean, one thing i've learned about finance is that others will hijack common terms like front running and redefine them. The SEC has the job of handling this
by chollida1 3y ago
I mean, one thing i've learned about finance is that others will hijack common terms like front running and redefine them.
The SEC has the job of handling this in the US and I cited them. You cited Wikipedia. I'm happy with using the definition that the SEC uses.
Maybe someone somewhere now uses wash trading to mean raising the prices but if you actually think about the name its meant to mean nothing changes after the trade, meaning no price change.
Given we're talking about the NYSE and therefor the SEC, i'm happy using their definition vs the wikipedia definition but I understand why you came to your opinion. Thanks for sharing!!
- crazygringo 3y agoI'm terribly sorry but you seem to be continuing to miss the point -- there are no different definitions here. Nobody is hijacking anything. The SEC definition is obviously correct insofar as each individual wash trade is executed at the same price -- it is sold at price X and bought at price X. But then multiple wash trades can create a sequence of seemingly rising prices. Even though each individual pair has a matching price. Nothing in the SEC definition from that case contradicts this. Nothing in the SEC definition requires that the offer (first) half of a wash trade be a legitimate market price -- it can be made at a price artificially higher than the market, which is sometimes the whole point. It's easy to read up further on this, there's lots of material available online which explains this -- how each half of a wash trade uses the same price, but a sequence of them are used to raise the apparent market price. Again, this is 100% in line with the SEC definition.