SIE practice questionhardMarking the Close
Placing trades near the close of the market specifically to influence the closing price of a security is known as:
- AMarking the close✓ Correct answer
- BAfter-hours trading
- CLate trading
- DDark pool execution
Explanation
Why A — Marking the close
Marking the close is a form of market manipulation where trades are placed near the end of the trading day to artificially influence the closing price. The closing price is important because it is used for margin calculations, index valuations, mutual fund NAV calculations, and options settlement. This practice is prohibited under SEC and FINRA rules. After-hours trading (A) is legitimate trading after market close. Late trading (C) refers to mutual fund trading after NAV calculation.
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