illegal: Poop & Scoop ; Short & Distort ; Stock Basher ; Ghosting ; etc
NOTE: You can find many definitions and articles, but here are a few examples.
Poop And Scoop (highly illegal)
investopedia.com
..."A highly illegal practice occurring mainly on the Internet. A small group of informed people attempt to push down a stock by spreading false information and rumors. If they are successful, they can purchase the stock at bargain prices. Poop and scoop is the opposite of pump and dump."...
Short And Distort (illegal )
investopedia.com
..."An illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and other kinds of unverified bad news in an attempt to drive down the equity's price and realized a profit. Due to recent corporate scandals and investor uncertainty, fraudsters have an easier time spreading doom and gloom by claiming that a firm is losing a very costly class action suit or is suffering from low earnings. In order to prevent being conned, investors should do their own due diligence and be critical of the authenticity of news from unverified sources."..
Also see longer article :
The Short And Distort - Stock Manipulation In A Bear Market
investopedia.com
Stock Basher (illegal)
investopedia.com
An individual, either acting alone or on behalf of someone else, who attempts to devalue a stock by spreading false or exaggerated claims against a public company. After the stock's price has dropped, the basher, or the basher's employer, will then purchase the stock at a lower price than what he or she believes it is intrinsically worth. This is an illegal activity that can carry significant legal repercussions. The basher is generally paid on the basis of how many lies and negative rumors are spread, which can dramatically affect a stock's value. If an investor believes some of the lies, he or she may sell off the stock at the higher price before it falls. The basher will then purchase the stock and ride out the gains.
Manipulation (most cases, manipulation is illegal)
investopedia.com
..."The act of artificially inflating or deflating the price of a security. In most cases, manipulation is illegal. It is much easier to manipulate the share price of smaller companies, such as penny stocks, because they are not as closely watched by analysts as the medium- and large-sized firms.
Also known as "price manipulation".
One way people can deflate the price of a security is by placing hundreds of small orders at a significantly lower price than the one at which it has been trading. This gives investors the impression that there is something wrong with the company, so they sell, pushing the prices even lower. Another example of manipulation would be to place simultaneous buy and sell orders through different brokers that cancel each other out but give the perception, because of the higher volume, that there is increased interest in the security."...
Ghosting (illegal)
investopedia.com
..."An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. Ghosting is used by corrupt companies to affect stock prices so they can profit from the price movement. This practice is illegal because market makers are required by law to act in competition with each other. It is known as "ghosting" because, like a spectral image or a ghost, this collusion among market makers is difficult to detect. In developed markets, the consequences of ghosting can be severe."...
Front Running (illegal)
investopedia.com
..."The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients have been given the information. For example, analysts and brokers who buy up shares in a company just before the brokerage is about to recommended the stock as a strong buy are practicing front running. Another example is a broker who buys himself 200 shares in a stock just before his or her brokerage plans to buy a large block of 400,000 shares. "...
Tailgating (not illegal like front running, but it is not looked upon favorably)
investopedia.com
..."The action of a broker or advisor purchasing or selling a security for his or her client(s) and then immediately making the same transaction in his or her own account. This is not illegal like front running, but it is not looked upon favorably because the broker is mostly likely placing a trade for his or her own account based on what the client knows (like inside information)."...
Holding The Market (practice is outlawed except in rare case when broker or other party is mandated to keep the price steady)
investopedia.com
..."The practice of placing active or pending orders for a security into a market where the price is dropping rapidly in an attempt to "hold" the price of the security steady, or create a floor in the security. This practice is outlawed in most market instances, except when a broker or other party is mandated to keep the price of a security steady. This is only done in rare cases where there isn't enough market depth to hold the price. Holding the market is also sometimes used as a slang phrase for owning a general market index such as the S&P 500 or Wilshire Total Market. Holding the market is hard to pull off these days because any one person would have to have very deep pockets to make a significant impact on a security's price. One of the things that keeps holding the market from occurring more frequently is that it is rarely profitable and can often lead to severe losses if prices do not rebound."...
Do traders, market makers, specialists or others ever deliberately drive a stock's price down to "shake out" the last sellers?
investopedia.com |
