Wash trade (also called round trip trade or wash sale) means entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position.

This is a market-manipulation practice used to misrepresent the number of transactions occurring on any given day. Wash trades artificially inflate volume and revenues, but in reality add no profit.

Wash trade is considered to be highly illegal, and offenders are punished quite severely. The reason people do this Wash Trading is to make other investors think that the stock is over active and there is some type of big new. It is usually done to help increase a stock's price.