# Pushing Share Prices Down



## Lucstar (6 November 2004)

I know this may be a stupid or obvious question? But what methods are there to deliberately push a share price down? Is it simply a matter or loading yourself up with your target share and selling out immediately for dirt cheap?


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## GreatPig (6 November 2004)

Lucstar,

I have to ask: what would be a motive for wanting to do this?

GP


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## clowboy (6 November 2004)

while it can be done (and am sure it sometimes is) dont get cuaght doing it or you will end up in court against the likes of ASIC


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## Lucstar (6 November 2004)

Hmm, i didn't know losing money was illegal. I was just curious becuase as some of you may know from my previous thread, i am watching a very interesting tv drama series, which revolves around the stockmarket. Interestingly in a particularly chapter, two millionaires battle it out on the market. One opponent discovers what stock the other is purchasing and therefore deliberately pushes the prices down, but of course this practice came at a huge cost.


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## Lucstar (6 November 2004)

I thought only deliberately releasing false information was illegal.


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## clowboy (6 November 2004)

to the best of my knowledge, deliberatly manipulating a share price is illegal.

I could be wrong, have been in the past, will be in the future.

While it would seem that doing so at ones own loss is of no real gain, if it forced a stock into a downward trend (for no other reason than someone dumping alot of stock) it could provide the oportunity to then purchase the stock at a heavilly discounted price and then reap the benifiets.

Of course we would be talking large volumes and a huge initail loss but who knows.

just a mumble opinion.


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## Lucstar (6 November 2004)

Yes, but what if the dumping of one's stock was such huge volume that it manages to severely damage the confidence of the stock? Would that put the stock into a downtrend for a while?


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## GreatPig (6 November 2004)

Lucstar,

I think ASIC would take a dim view of anything that appeared to be manipulating the price, possibly halting trading in the stock until they'd investigated.

The rules are pretty strict about price manipulation, as they are with insider trading. For example, as a director or senior executive, you have to be careful about buying or selling shares in your company too close before market announcements, otherwise it could be deemed to be insider trading if the price changed significantly just after the announcement. It looks pretty dodgy when a director sells a pile of shares then the next day releases a profit warning to the exchange (yes, yes, I know... he didn't sell them, his wife did, and she of course knew nothing about the company business  ).

GP


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## SJT (7 November 2004)

Section 1041A of the Corporations Act prohibits creating an artificial price for trading in financial products. I know this because it's a question in my assignment.


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## still_in_school (7 November 2004)

Hi Guys,

honestly you see this all the time, on live market data depths...

you see the price yo-yo up and down, pretty much doing nothing at all, but also you will see the great pump and dump game, or even the battle of the U bids...

there are so many names for this... 

* defense defense
* battle of the U bids
* yo-yo playing
* pumps and dumps 

but the funniest i like to watch is, when you see someone trying to place a U bid on BHP or NCP, and the sellers just knock out that bid within seconds... in a smaller stock, that might be a speed bump, but in the larger blue chip stocks, they run over it like its a flat road... with no give way or stop sign...

Cheers,
sis


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## Lucstar (8 November 2004)

That is a good point sis, dont we see this all the time? 
Btw sis or someone: could you explain to me what are battle of the U bids?
Cheers


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## stefan (8 November 2004)

> could you explain to me what are battle of the U bids?



A U bid is an undisclosed bid for which we don't know the real size. Brokers can enter u bids when an order is bigger than $100'000. The battle of the u bids relates to the strategy used by brokers to make a stock look stronger/weaker than it really is by putting in a u bid on either side of the market. If you see a u bid on the buy side, you would think that somebody is trying to buy massive amount of shares at a certain price. This will suggest confidence in the stock and therefore will bring in more buyers. However, these bids tend to disappear quickly shortly before the market price is reaching the U bid level. It turns out to be a fake bid that was placed there by a broker just to inflate the buying/selling pressure. 

It's a nasty game, but you can spot those bids as they normally tend to be just one tick above or below the current market price. They go away once the level is reached only to turn up once again below the current level.

In a quick moving market, such bids can be extremly dangerous as the broker may not have enough time to remove his fake bid and ending up with lots of shares he didn't really want in the first place.


Happy trading 

Stefan


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## Lucstar (8 November 2004)

So would you call that manipulating the share price?


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## still_in_school (8 November 2004)

Hi Lucstar,

very well explained by Stefan (thanks), it is market manipulation, and on smaller stocks... it can have great effect in moving the price around, just be weary when you see a U bid...

but in such stocks like the big BHP, NCP, its only a speedbump... no real market effect...

Cheers,
sis


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## stefan (8 November 2004)

> So would you call that manipulating the share price?



If I was to buy a majority in MUL (which is only about 700'000'000 shares anyway  ), I probably wouldn't want anybody to know so I'd advice my broker to put in a U bid while buying all 700'000'000 shares at the current level. The rest of the market wouldn't have any idea what's going on until my order becomes less than $100'000 in size. by that time I've already bought most of my shares anyway. 

If on the other hand I'd have put my order in the usual way, the market would have thought: MAN! There must be something in the bush. We better get into it as long as we can. The price would run away and I'd never get my 700Million shares at a decent price. 

So if you see a U bid for MUL, it could be me planning a take over. 

On a more serious note this shows what U bids are about and why they have an impact on the market. Speculation and rumors are part of it and that's why a U bid tends to influence the price. I wouldn't say it has a major impact and as SIS said, it is of limited use. However, as shown in my example, it can be a serious tool for a big investor to hide his intentions at least for a while.


Happy trading

Stefan


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## tech/a (8 November 2004)

Hmmm.

An interesting discussion about a myth!

After all I have been nominated as Authenticator of Myths.

While it is a common misconception that this occures ASIC would be all over it like a bad case of heat rash.

Brokers like their liciences.

Try it yourselves and see what reaction you get.


tech


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## Lucstar (8 November 2004)

"So if you see a U bid for MUL, it could be me planning a take over" Stefan

Firstly, would like to thank everyone for such insightful explanations. Also i'm interested to know, would a take over benifit or harm a company. Originally, i was quite positive that a take over of a company would be very bad news for shareholders. However, reading through some of your posts, i start to have doubts. So whats the story there??


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## stefan (8 November 2004)

> An interesting discussion about a myth! After all I have been nominated as Authenticator of Myths.



I'm sorry to say that this is not a myth. It is actually happening almost every day. As you may be aware by now, I was closely following MUL for some time and this is just one of the stocks where you can see it happening. U bid a tick below current bid, changing again once the price comes down or vanishing completely shortly before it would have been hit. Not to mention that this will be ever so hard to proof for ASIC as a broker can easily claim that his client changed his mind. You would need to monitor it closely and there simply aren't any ressources left to do that.

Tech, clearly this is illegal but it happens. No myth. After all, you only have to follow what's going on in the market (which I have no doubt you do extensively) to see that illegal things are happening every day and cheats are getting away with it easily. ASIC is only half as powerful as you would like to believe and before they start an investigation, lots of things already had to go wrong over a long period of time. 



> After all I have been nominated as Authenticator of Myths.



 There is a difference between myth and turning a blind eye on things. ASIC is weak, short of staff and they themselves have mentioned it many times: They can only focus on the most important issues. A few u bids on a penny stock won't wake up their interest.

It is time to realise that traders are not at all that protected as some of us may want to believe. I see lots of postings about ASIC will do this, ASIC will do that. Fact is, ASIC hardly ever does anything unless the damage is so big and so many people lost their savings that it simply can't ignore it any longer. Very, very rarely do you see ASIC taking a pro active approach. You can't blame them. There are just too many sharks out there to protect all the beaches 

Happy trading

Stefan


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## Lucstar (8 November 2004)

So, placing U bids aren't illegal, but the way people use it to their advantage is? Am i correct?


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## stefan (8 November 2004)

> So, placing U bids aren't illegal, but the way people use it to their advantage is? Am i correct?



Yes, you're correct. U bids are prefectly legal. 

Happy trading

Stefan


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## tech/a (9 November 2004)

When you log in a bid to sell or buy with an ONLINE broker once you hit Submit then all is recorded.So your "U" bidders have an electronic trail.

Now ASIC havent and wont take any action as there isnt ANY market manipulation-----------simply it doesnt work----------if it did they would take action---------Just ask Rivkin if they are toothless.

Secondly Full service brokers--------unless you want "Tosser" tattooed in your forehead from your broker that I wouldnt think youd even ask!

The myth is firmly in place.

There is no market manipulation by using "U" bids.
ASIC concurs.


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## stefan (9 November 2004)

tech,

This will go nowhere. you believe it doesn't exist, I believe it does. Whether it is a myth or not is impossible to proof. I can't ask Rivkin about ASIC but I can keep an eye on what's happening and you would have to be blind or willing to turn a blind eye on things if you happily believe that the market is paradise with ASIC on constant watch, catching whoever is doing something wrong. 

ASIC have their glorious moments every so often. But they nevertheless aren't able to follow it all. It's of no use to have a record of a U bid somewhere. There are hundreds of them. It's perfectly legal to enter a U bid and to change it as many times as you like. Proofing that its purpose is to manipulate the market would be rather tricky.

Let's face it, the stockmarket is far from perfect. ASIC is no more than a traffic patrol. They will catch the odd offender but they can never watch them all. 

Happy trading

Stefan


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## Mofra (9 November 2004)

Its not just Undisclosed orders (U boats) that manipulate price.

Countless market openings (predominantly on small caps) you will see dummy bidders place large orders that push the open price up a tick or two, only to see it disappear just prior to market open. It seems to be a fairly common practice but on a daily basis you can see bids moved up trying to jump the queue - people get caught every day.

Of course, the longer your term the less important intra day moves become   

Cheers


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## tech/a (9 November 2004)

So dies the placement of an undisclosed bid in a buy or sell que influence you  or any one else in your trading?

Particularly when the non genuine bids disappear as you say from the line up once hit.

Simply my arguement is that they have no influence.
As such they dont manipulate the market--------thats your view that they do.

Anyway Im fine with you think they are successful and I dont.


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## stefan (9 November 2004)

tech,

the bid itself does not have that much of an influence. But countless examples have shown that once they appear, the market shows a reaction. I'm not saying it will initiate a 50% run, but it does increase the bid size considerably. You've mentioned it in your other thread: Too many people try to find the bottom. Now because there are so many out there, once a U bid appears, traders looking for that bottom do get the impression that the volume is strong and they will finally buy. (We both agree that this is a rather stupid behaviour, but since 97% of traders aren't successful, I'm not surprised it happens. It's the classic "go with the crowd" thing.)

Happy trading

Stefan


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## Mofra (9 November 2004)

tech,  

Try logging onto the commsec chatsite and wait until a u-boat appears on a smaller cap share. By the paniced discussion I would say it certainly has some effect - an experienced trader with a MT or LT entry bid would ignore it, but there is quite a bit of inexperience trying to make fortunes in smaller companies.


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## markrmau (9 November 2004)

Just my interpretation, but when the pro's really want to ditch stock, they continually put on parcels of stock on the market, and not do a /u. I have seen this with AGL after the AGM, and yesterday/today with WBC. The parcels were generally 10,000 sized, for share prices of about $13 and $18.5 respectively (which would have qualified for /u).


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## still_in_school (15 November 2004)

Hi Guys,

in a way, also trading, is like playing Chess with the market...

anyone want to Check Mate? 

Cheers,
sis


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## tosegue (27 May 2019)

Personally I have found the best way to force a share price down is for me to buy some.


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## aus_trader (28 May 2019)

tosegue said:


> Personally I have found the best way to force a share price down is for me to buy some.



Hey tosegue, it's interesting you found this very old thread and decided to revive it.

Don't beat yourself up, it's a tough game. I've been doing it for a long time and still most positions go against me as soon as I buy especially on the speculative end of the market which can be seen in the thread Speculative Stock Portfolio. Most trades end up as losses but some of the few that win do go for a good run. Recently couple of ASF members help me run the numbers on that portfolio and so far it has a small +ve edge i.e. it has made me some money even after all the brokerage costs are deducted. Which is better than most of the speculative stock picking newsletters and small cap investing subscription services. I have tried a lot of them and overall most of them have a -ve edge if you put money into every single stock they recommend.


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## tosegue (29 May 2019)

Sorry I read a lot of the old stuff and forget where I am and coment,


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## kahuna1 (29 May 2019)

On occasions ASIC acts.

Suggesting they are without teeth is like suggesting Rivkin is honest.
Over the years a few have gone to court, many have been fined and MOST get away with it.
A few famous cases, one involving a group in a small company, the CEO and his kids and a broker actually did go all the way. GTG ,,


Most... say like LUM where a person on Hot copper had 7 nics and was spreading rumors ... sitting next to the MD and other secret deals ... they caught that idiot with help ... REPORT IT ... but ignored the pump and dump via inside selling of a worthless company and a substantial holder dumping their shares whilst the company was being run like the Russian Mafia and inside reports of great deals which were FAKE ... no deals existed or ever hit their accounts, the real crooks ASIC did nothing even when reported.

This stuff goes on.
Top dressing and reports from companies that are absurd.
LIES ...
If they lie ... and it costs you ... take them to court as was the case with a whole lot of people in many many cases over the years. One case took about 10 years but the investors got all their money back from one of those Timber companies when the management lied. Doing this, they opened the floodgate to the company directors assets via breaches of duties of directors.

All this aside .... report it to ASIC if its clearly being played with. They DO and WILL take action.

Brokers get fined and massively so if someone takes the TIME to report it.
Note the date and time and size of the bids and report it.

That said, volume and fake bids and so on ... IGNORE IT .... well I know most follow tech stuff alone and sadly I know exactly how to get sheep to buy what comes out my behind and pay top dollar for it. First I make the market look bid, then buy it through a chart point and keep buying whilst also having sell orders up above, when the teams of chart devoted come and buy, I offload all my purchases and my original long into their  buying. NOTHING illegal with making people who are willing to buy my worthless ejecta for a lot of mo0mney in this case. I put in bids, I was not faking anything. I purchased the shares, I took the risk, hoping the legions of people who buy things without knowing what the hell they are worth ... would like the sheep follow.

They do .... and did.
Repeat over and over again with new sheep.
In the case of say LUM above, many years ago ... whilst crooks and Russian Mafia style pump and dump with inside involvement  they marched a share, worthless ... up from 12 cents to over $1... oh and its worthless now ... with insanely bullish announcements of deals that never hit accounts, media reports even media figures doing stories on a product which ... well ... was  a sham ... and in the process pocketed about 80 million.

ASIC was infomred and did little other than the HC poster.

I strongly as always suggest serious fundamental analysis .... of a stock ... its value and merits.

If your silly enough to pay $1- for something worth 1 cent ... and the person actually goes are you sure you want to do that ? Which is the case with any order entered ... sadly its your call.

Not much is said about merits of larger stocks and say CSL which is a 50 bagger has virtually no followers on chat sites. ITs like speaking to yourself. Or say MFG 45 fold gain in 10 years. Much the same for most decent long term stocks.

Such is life, but bidding and manipulating stocks and dressing them up for month end, quarter end is normal and impossible to escape. Most penny dreadfuls ... irrelevant .... and no real funds dressing
up the share price of stock which they don't hold. Sure some smaller funds hold mid and small caps, but they DO place real bids and offers ... so u can get in or out if they are annoying you.

Have fun


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## frugal.rock (10 June 2020)

aus_trader said:


> Hey tosegue, it's interesting you found this very old thread and decided to revive it.
> 
> Don't beat yourself up, it's a tough game. I've been doing it for a long time and still most positions go against me as soon as I buy especially on the speculative end of the market which can be seen in the thread Speculative Stock Portfolio. Most trades end up as losses but some of the few that win do go for a good run. Recently couple of ASF members help me run the numbers on that portfolio and so far it has a small +ve edge i.e. it has made me some money even after all the brokerage costs are deducted. Which is better than most of the speculative stock picking newsletters and small cap investing subscription services. I have tried a lot of them and overall most of them have a -ve edge if you put money into every single stock they recommend.



Hey @austrader, found this thread plugging your thread from a while ago... brilliant.


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