An arranged Transaction that appears to be a set of actual buys and sells of an asset, but which does not affect a trader's net position. A wash trade is prohibited by the commodity exchange Act in the United States, although a wash trade might occur in the Interbank forex market as a favor extended by a market maker to a broker who is attempting to complete a deal where two counterparties cannot deal directly with each other due to credit line restrictions, but they can each deal with the market maker's bank.
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