Wash trades as a stock market manipulation tool

Serkan Imisiker, Bedri Kamil Onur Tas*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)


This study empirically investigates the profitability of one of the most widely used trade-based manipulation tools, namely wash trading. Using a unique account-level data set for the period 2003–2006 from the Istanbul Stock Exchange (ISE), we generate a measure for the usage of wash trades for each individual account and examine whether wash trading provides excess returns for investors. Our empirical results reveal that significant numbers of investors perform wash trades. In addition, we analyze the optimal percentage of wash trades at which investors maximize excess profits. We find that having up to 10% of total trades as wash trades is the most profitable range, with a 0.5% monthly excess return.

Original languageEnglish
Pages (from-to)92-98
Number of pages7
JournalJournal of Behavioral and Experimental Finance
Publication statusPublished - Dec 2018


  • Market structure
  • Trade-based manipulation
  • Wash trades

ASJC Scopus subject areas

  • Finance


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