We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What does "Painting the Tape" Mean?

By Anna B. Smith
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Painting the tape is the practice of creating misleading stock data for the purpose of manipulating stock prices. It typically occurs among brokers, traders, and other professionals who represent investors in the stock market. This practice is generally illegal as it generates false statistical data in regards to the market upon which many investors base their purchases.

The term 'painting the tape' refers to the ticker tape that originally printed stock data. Long rolls of this thin paper were traditionally fed through a stock ticker machine, which would print a company name in predetermined abbreviations and the activity of its stock. Though ticker tape is no longer in use, stock prices continue to be printed alongside corporate abbreviations and are available electronically over the Internet. A broker may paint it by attempting to influence the price of a particular stock. There are a large variety of ways in which an individual may paint the tape.

One way in which a broker might paint the tape is to call in the purchase of a large number of stocks immediately, before the market closes at the end of the month. That sale would not accurately reflect the stock's activity for the day or the month. Statistical analysis that reports on the health and activity of the market daily tends to value closing numbers more highly than the numbers gathered throughout the day. As a result, that large sale would taint the analysis of the stock in question, causing it to appear more valuable to investors than it is in reality.

Painting the tape might also occur in the form of false trading. This can happen when brokers, or other experienced market investors, agree to buy and sell a particular stock among themselves. The stock then appears to have generated a large volume of activity, indicating health and potential growth of the company it represents. This volume, however, is only attributable to its being passed between brokers and not to overall corporate growth.

Brokers may also choose to spread a purchase for a client across multiple transactions. For example, a client might request the purchase of 100 shares of a particular company, and the broker could call it in at intervals of five stocks or less. That stock's transaction numbers would then climb, falsely indicating to other investors that a purchasing frenzy is taking place in relation to potential corporate success.

A broker or trader may be accused of painting the tape when his or her stock purchasing activities do not coincide with any corporate changes. A large volume of stock purchased in a particular company, which has not made any announcements or changes to the way in which it does business, would tend to appear suspicious. In such cases, the broker or trader may be investigated, however, the activity can be difficult to prove and charges related to this crime are often not filed.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.