“Washing”

Could you please explain “washing” ? Is buying a parcel of shares at a cheap price and selling a parcel of the same shares , bought previously at an expensive price, in order to lower your overall average buy price, considered washing?

A: Yes, that is one definition, but perhaps with the purpose of crystallizing a capital loss.

There is also dividend washing or dividend stripping, where you buy a stock “cum” to receive the franked dividend, and sell it “ex” dividend.


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