7Newswire
06 Jan 2023, 21:21 GMT+10
Market manipulation refers to the act of artificially inflating or deflating the price of a security or otherwise influencing or manipulating the stock market behavior for personal gain. Tampering is illegal in most cases, but it can be difficult for regulators and other authorities to detect, as it has been in many cases.
Manipulation is also difficult for manipulators as the size and number of participants in the markets increases. For example, it is much easier to manipulate the price of shares of smaller companies, such as penny stocks, because they are not watched as closely by analysts and other market participants as the shares of large- and mid-cap companies. Manipulation is also called price manipulation, stock manipulation, and market manipulation.
Manipulation is usually difficult to detect, but it is also difficult for the manipulator as the size of the market and the number of participants increase OANDA review.
Two common types of stock manipulation are the "pump and dumb" and the "poop and scoop".
In the most regulated markets such as the stock and futures markets, manipulation is prohibited and prosecuted and can lead to legal consequences for the manipulators.
Currency manipulation is the deliberate devaluation of a nation's currency by a government.
Manipulation takes many forms in the markets. One way that people can lower the price of a security in the market is by placing hundreds of small orders at a price that is significantly lower than the asset's current price. This causes investors to get the impression that something is wrong in the market, so they sell and push prices even lower.
These manipulation techniques with bogus orders are often combined with the spread of false information through online channels and other media regularly used by other researchers. The external barrage of bad information is combined with seemingly legitimate market signals to encourage traders to buy or sell in a market.
The technique known as "pump and dump" is the most commonly used manipulation to inflate the value of a small-cap stock artificially and then start selling hard, leaving investors who entered late thinking the Bull Run was going to continue stuck in the market. An overvalued stock. This form of manipulation is also used in other markets, such as cryptocurrencies. It is not uncommon for Bitcoin whales to momentarily raise the price of the cryptocurrency to attract buyers so that at a certain point they start selling and trap a large number of buyers who have to sell to avoid massive losses. In this way, the whales gain from the market crash and can buy BTC at lower prices.
The opposite of "pump and dump" is the method known as "poop and scoop", although it is less common. This form of manipulation is used less because it's harder to make a legitimately good company look worse than it is to make an unknown company look awesome.
In futures markets, manipulation is prohibited and prosecuted and can lead to legal consequences for the manipulators.
Currency manipulation is the deliberate devaluation of a nation's currency by a government.
Manipulation takes many forms in the markets. One way that people can lower the price of a security in the market is by placing hundreds of small orders at a price that is significantly lower than the asset's current price. This causes investors to get the impression that something is wrong in the market, so they sell and push prices even lower.
Currency manipulation is a slightly different class of market manipulation in that only central banks and national governments can participate in it, and these are legal authorities themselves. Being the owner of a fiat (government-backed) currency legitimizes many of the actions these governments take to suppress or inflate the value of their currency compared to their peers. Although currency manipulation is not illegal, a country that is manipulating its currency can be accused by other nations or punished with sanctions approved by its trading partners.
In addition, international bodies such as the World Trade Organization (WTO) have been encouraged to play a greater role in addressing accusations of currency manipulation.
Devaluation is the way of manipulating a currency through the deliberate downward adjustment of the value of a country's currency relative to another currency, group of currencies, or monetary standard. The government that issues the currency decides to devalue its currency, and unlike depreciation, this loss in value is not the result of non-governmental activities.
One reason a country may devalue its currency is to reduce a trade imbalance. Devaluation lowers the cost of a country's exports, making them more competitive in the global market, which in turn increases the cost of imports, making domestic consumers less likely to buy them, and further strengthening companies' nationals. As exports increase and imports decrease, there is an improvement in the balance of payments by reducing trade deficits. That means that a country that devalues its currency can reduce its deficit due to strong demand for cheaper exports.
Get a daily dose of Tennessee Daily news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Tennessee Daily.
More InformationBANGKOK, Thailand: Following China's reopening and the end of its strict COVID-19 restrictions, businesses on Thailand's holiday island of Phuket ...
NEW YORK, New York - Recession fears faded on Wall Street Thursday as annualized 4th quarter GDP (gross domestic product) ...
WASHINGTON D.C.: In December 2022, US existing home sales declined to a 12-year low, but lower mortgage rates raised cautious ...
SEOUL, South Korea: Korea Customs Service data released this week showed that South Korean exports for the first 20 days ...
SEATTLE, Washington: Amazon.com's cloud services division, Amazon Web Services (AWS), has announced that it will expand its data centers in ...
NEW YORK, New York - U.S. stocks crumbled on Wednesday as the extended rally on Wall Street came to an ...
DHAKA, Bangladesh - The United States Agency for International Development (USAID) is committing an additional $75 million in humanitarian aid ...
WASHINGTON D.C.: As part of its efforts to simplify the national COVID-19 vaccine strategy, the US Food and Drug Administration ...
WASHINGTON D.C.: US authorities said this week that a surge in Cubans and Nicaraguans arriving at the US border with ...
WASHINGTON D.C.: In December 2022, US existing home sales declined to a 12-year low, but lower mortgage rates raised cautious ...
HONOLULU, Hawaii: The casket bearing Abigail Kinoiki Kekaulike Kawananakoa, long considered the last Hawaiian princess, has gone on public viewing ...
WASHINGTON D.C.: Based on a range of measurements, US manufacturing could have entered a recession in the fourth quarter of ...