Accomodation trading

A type of trading in which two or more traders agree to temporarily hold a certain amount of stocks for the benefit of a member in the party usually to evade or cheat taxes. This a form of illegal trading in which trader Joe wishes to lower his taxes before tax season. For example trader Joe just hit big gains on a stock he owns, this translates to huge capital gains tax. To compensate this tax payment he will artificially create capital losses to lower the total amount owed. Trader Joe will sell another winning stock he owns to his friend at a price lower than the current market value. If trader Joe bought the stock at $10 a share and the stock is currently trading at $15, he will artificially create a capital loss by pretending to have sold the shares to his friend Bill at $5 a share which appears to be a capital loss. This can be done if trader Joe thinks the stock is surely to hit $15 a share but at a moment in time dipped to $5 temporarily. At this point he will let his friend "hold" it for him at $5 a share to appear as capital loss when it goes back up to $15.

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