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Marking the close

Illegally trading near the end of the session to push the official closing price to a level that benefits a position, valuation or benchmark.

Because the benchmark-close sets fund valuations, derivatives settlements and index levels, a small push at the right moment can be worth far more than the cost of the trades. That is exactly why it is prohibited and heavily surveilled.

Related prohibited conduct includes marking the open, marking month-end for performance reporting, and coordinated closing trades to influence a settlement price.

Example: a fund holds 4 million shares valued at the close. Spending $90,000 lifting offers in the last ninety seconds moves the close from 24.90 to 25.05, adding $600,000 to the reported mark. The economics are obvious, and so is the pattern on a surveillance report.

Related: benchmark-close, closing-auction, market-manipulation, momentum-ignition

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