medium · Market Microstructure lob
How does 'Painting the Tape' differ from 'Wash Trading'?
- Painting the Tape uses hidden orders; Wash Trading uses only lit, visible orders.
- Painting the Tape targets specific price levels; Wash Trading targets artificial volume
- Wash Trading needs multiple coordinated accounts; Painting the Tape needs just one trader.
- Wash Trading is legal for registered market makers, while Painting the Tape is always illegal.
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