Wash Sale

Wash Sale - A Wash Sale is stock, approved by the Federal Reserve and an investment broker to serve as collateral for margin debt. A margin debt is achieved when someone is buying stock with borrowed money. They are put in separate accounts; so called margin accounts and it is an effective way for a broker to reduce financing charges. The criteria to use securities for margin debts are usually strict. The Federal Reserve has a set of standards for this kind of stock accounts. Brokers often use standards that are even stricter than the Federal Reserve's set of standards.