CandleFocus Glossary Editor
Market manipulation is a widespread technique used by traders and investors to gain an advantage at the expense of others in the markets. The goal of manipulating a market is to create artificial supply and demand patterns that create inaccurate signals about the availability and price of an investment instrument. These false signals can then be used to exploit the market for personal gain. Market manipulation is an illegal activity and is subject to criminal charges, fines, and imprisonment.
The most common form of market manipulation is the “pump-and-dump” scheme. With this type of manipulation, speculators will buy a certain security or commodity in large quantities in an attempt to artificially inflate its price. After the price is achieved, the manipulators then quickly sell the security for a large profit. Primarily, pump-and-dump schemes target smaller stocks and commodities that can be easily manipulated due to their small market capitalization and limited liquidity.
“Poop-and-scoop” is a manipulation technique where investors spread false information about a security in order to drive down its price. The manipulators buy the depressed stock at the low prices and then sell it off as the market sentiment improves, generating significant profits from their short-term transactions. This manipulation method is more sophisticated than the pump-and-dump as it does not involve artificial inflation of prices.
Currency manipulation is a distinct form of market manipulation primarily used in political disputes between sovereign countries. Currency manipulation involves the intentional devaluation of one country’s currency relative to another in order to create an unfair advantage in global trading. This type of manipulation can be used to influence exchange rates, alter monetary policies, and ultimately shift the economic power balance of the countries involved.
In conclusion, market manipulation is an illegal activity and a serious offence. It is used to gain an advantage over other market participants by artificially inflating or deflating the price of a security. The two main types of stock manipulation schemes are pump-and-dump and poop-and-scoop, while currency manipulation is used primarily in international trade disputes. It is important for investors to be aware of these schemes and to invest with caution.
The most common form of market manipulation is the “pump-and-dump” scheme. With this type of manipulation, speculators will buy a certain security or commodity in large quantities in an attempt to artificially inflate its price. After the price is achieved, the manipulators then quickly sell the security for a large profit. Primarily, pump-and-dump schemes target smaller stocks and commodities that can be easily manipulated due to their small market capitalization and limited liquidity.
“Poop-and-scoop” is a manipulation technique where investors spread false information about a security in order to drive down its price. The manipulators buy the depressed stock at the low prices and then sell it off as the market sentiment improves, generating significant profits from their short-term transactions. This manipulation method is more sophisticated than the pump-and-dump as it does not involve artificial inflation of prices.
Currency manipulation is a distinct form of market manipulation primarily used in political disputes between sovereign countries. Currency manipulation involves the intentional devaluation of one country’s currency relative to another in order to create an unfair advantage in global trading. This type of manipulation can be used to influence exchange rates, alter monetary policies, and ultimately shift the economic power balance of the countries involved.
In conclusion, market manipulation is an illegal activity and a serious offence. It is used to gain an advantage over other market participants by artificially inflating or deflating the price of a security. The two main types of stock manipulation schemes are pump-and-dump and poop-and-scoop, while currency manipulation is used primarily in international trade disputes. It is important for investors to be aware of these schemes and to invest with caution.