accommodation trading
A type of trading in which one trader sells a security or a currency to another for less than the current price, with the expectation that it will be sold back at the same price. Accommodation trading is usually done to avoid paying taxes. For example, suppose Trader A buys 1,000 euros for 1,400 dollars. The exchange rate changes and those 1,000 euros are now worth 1,500 dollars. When taxes are due, Trader A sells the 1,000 euros to Trader B for 1,400 dollars, and therefore does not have a profit subject to taxes. after tax season, Trader B sells the 1,000 euros back to Trader A for 1,400 dollars. This type of trading is illegal in the U.S. and Great Britain.
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