Painting the Tape
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. The idea is that unsuspecting investors 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 .
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 of people are crowding to buy the stock.