Introduction to Marking the Close and Window Dressing

QUICK DEFINITION: Obtaining market prints at the end of a trading session at prices that improve the valuation of a large held position.

The performance of asset managers is usually measured by closing prices at the end of a particular trading session. In futures and other margin-based markets, closing prices determine margin calls. Closing prices are thus particularly attractive targets for market manipulators.

Marking the close and window dressing occurs when a trader holds a significant position in a thinly traded symbol and enters orders crossing the spread at or near the close of normal trading hours, in an attempt to cause the session to close at a price favoring the held position. Window dressing occurs only on the last trading day of the month and requires a longer position holding time. Marking the close can occur any day and requires a shorter holding time.

An example of marking the close shown in Surveyor

More on Surveillance Exceptions

Next, learn more about wash trades and cross trades.