Painting the Tape

Written By
Paul Tracy
Updated November 4, 2020

What is Painting the Tape?

In the finance world, painting the tape means to trade securities in a manipulative way in order to influence the reported trading data for those securities.

How Does Painting the Tape Work?

Let's say traders A and B want more people to buy the stock of Company XYZ. They decide to paint the tape by buying big blocks of Company XYZ shares from each other so that the ticker shows a huge jump in trading volume for the stock. The idea is that unsuspecting investors will see the spike in activity, think something is brewing, and buy the stock. This in turn drives up the price of Company XYZ shares, which is what traders A and B want. They sell their shares for a profit.

There are other ways to paint the tape, such as calling in a client's huge buy order in, say, five-share increments, so that it looks like lots of people are crowding to buy the stock.

Why Does Painting the Tape Matter?

It is illegal to buy or sell a security for the explicit purpose of changing the stock price.
 

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Painting the Tape.
Be the first to ask a question

If you have a question about Painting the Tape, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Painting the Tape, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Painting the Tape

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms