The Stock Stethoscope

The stock market can be manipulated in various ways, some of the most common techniques include:

Pump and Dump:

A group of investors artificially inflate the price of a stock by spreading false or misleading information about the company, creating hype and interest around the stock. Once the price of the stock rises, they sell their shares, causing the price to drop, and leaving other investors with losses.

Spoofing:

This involves placing large buy or sell orders with the intention of creating a false impression of market demand or supply. The manipulator then cancels the orders once the market moves in their desired direction.

Insider trading:

This is when individuals with insider information about a company buy or sell shares to make a profit or avoid losses. This is illegal and can result in severe penalties.

Bear raids:

This involves short selling a stock and spreading negative rumors to push down the price of the stock, creating panic selling among other investors.
Front running: This involves a broker buying or selling shares ahead of a large trade by a client, taking advantage of the movement in the stock price that the large trade will cause.

Painting the tape:

This involves creating the illusion of high trading activity by buying and selling the same shares repeatedly to make it appear that the stock is in high demand.
It’s important to note that market manipulation is illegal and can result in fines, legal action, and even imprisonment. It’s essential for investors to be aware of these practices and take steps to protect their investments.