Trading, Accounts & Prohibited ActsQuestion 258 of 398
Just before the market closes, a trader enters a flurry of small buy orders in a stock solely to push its closing price higher and inflate the value shown on month-end statements. This manipulation is known as:
a.Arbitrage
b.Position netting
c.Marking the close
d.Dividend capture
Explanation
Marking the close (or 'painting the tape' at the close) is entering trades near the close specifically to influence the closing price. It is a prohibited form of manipulation, often done to affect valuations, indices, or derivative settlements.
Law Reference: Securities Exchange Act of 1934Practice all 398 questions free — no signup required.
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