Market Manipulation

[dutchie]

Manipulating the Market

Call me cynical but I can't help but think/know that the market is manipulated by the big end of town et al.

Example: All the big stocks are presently down by about 6-8 % mainly due to one large sell lot in each stock, in the opening auction.
BHP has one seller of 2.6 million shares pushing the price down 19%.
(Dow down 1% overnight).

The opposite has now occured whilst I type! (up 6%)

Whats going on.

Is it possible for a broking firm to place a large lot of shares (buy or sell) in the pre open auction even though they don't own that amount of shares knowing that they can withdraw the order just before open (to influence the open somehow).

What other ways are the markets manipulated and how can we profit from those large scale manipulations other than having "inside information".


Cheers

Dutchie

 

[silence]

What other ways are the markets manipulated and how can we profit from those large scale manipulations other than having "inside information".

I have read that big holders will 'dump off' a fair amount just to trigger stop losses.

Say the price was 12.20, which might mean many stop losses were set at 12.00 or 11.95 (just random figures).

A big institution might dump shares until the price hits 11.95, triggering many more to be automatically sold. Then they buy back at the resulting price of say 11.60 (again just random figures but you get the idea).

 

[zuluwarrior08]

So you're saying the big boys place the order so it can appear in the order book, and people see that huge order to sell say 10 mins before the open. they then think that huge sell order will drive the price right down so they all sell, in effect actually driving the price down and causing stops to be hit?

L plates are bright yellow on this one. sorry if i got it wrong. any suggestions?

 

[professor_frink]

Manipulating the Market

Call me cynical but I can't help but think/know that the market is manipulated by the big end of town et al.

Example: All the big stocks are presently down by about 6-8 % mainly due to one large sell lot in each stock, in the opening auction.
BHP has one seller of 2.6 million shares pushing the price down 19%.
(Dow down 1% overnight).

The opposite has now occured whilst I type! (up 6%)

Whats going on.

Is it possible for a broking firm to place a large lot of shares (buy or sell) in the pre open auction even though they don't own that amount of shares knowing that they can withdraw the order just before open (to influence the open somehow).

What other ways are the markets manipulated and how can we profit from those large scale manipulations other than having "inside information".


Cheers

Dutchie

BHP's opening price is dictated by o/n moves in it's London and New York listings. This was discussed by spitrader1 in the BHP thread a while ago if you want to have a look.

Another reason you may see some weird things going on today is because of futures expiry.

 

[Nick Radge]

Dutchie,
It would be a portfolio being executed on behalf of someone - probably an overseas fund manager. The impact on the market will depend on the "tact" of the executing broker. I know JP Morgan or Morgan Stanley did one a month or so ago and did it over several days.

The other fact is that it maybe arb's unwinding their books on futures expiry.

Nick

 

[macca]

Futures expiry, are they on the last Thursday of each quarter ?

 

[nizar]

Example: All the big stocks are presently down by about 6-8 % mainly due to one large sell lot in each stock, in the opening auction.
BHP has one seller of 2.6 million shares pushing the price down 19%.
(Dow down 1% overnight).

I have BHP currently flat.

 

[bigdog]

Listed below are all the trades for CCP CREDIT CORP GROUP today:

SP was up 5 cents today at $12.10 with a high of $12.30

Do you think someone is playing games with the SP?
-- IMO note the trades of 42 shares whcih managed to pull up the SP several times!!!

Time----- Price --Vol --Value ----Condition Codes
16:10:32 12.1000 1,882 22,772.20
16:10:32 12.1000 500 6,050.00
16:10:32 12.1000 242 2,928.20
16:10:32 12.1000 258 3,121.80
15:55:11 12.1000 1,300 15,730.00
15:55:11 12.1000 1,005 12,160.50
15:55:04 12.1000 811 9,813.10 XT
15:54:54 12.1300 42 509.46
15:54:53 12.1300 29 351.77
15:47:58 12.2500 42 514.50
15:39:54 12.2500 42 514.50
15:37:50 12.2500 1,000 12,250.00
15:33:51 12.2500 42 514.50
15:18:42 12.2500 42 514.50
15:17:02 12.2500 340 4,165.00
15:08:38 12.2500 850 10,412.50
15:05:35 12.2500 42 514.50
14:51:27 12.2500 42 514.50
14:36:35 12.1300 171 2,074.23
14:31:54 12.1000 260 3,146.00
14:31:20 12.1000 1,093 13,225.30 XT
14:31:08 12.1300 1,500 18,195.00
14:31:08 12.1500 42 510.30
14:19:10 12.2600 42 514.92
14:14:27 12.2600 200 2,452.00
14:10:40 12.2900 113 1,388.77
14:03:01 12.2900 42 516.18
13:37:47 12.3000 42 516.60
13:30:00 12.1000 2,972 35,961.20
13:16:51 12.1000 2,000 24,200.00
13:10:32 12.1000 28 338.80
13:10:32 12.0900 14 169.26
12:51:21 12.0900 42 507.78
12:41:29 12.0000 168 2,016.00 XT
12:15:01 12.0000 42 504.00
11:59:53 12.0000 42 504.00
11:44:45 12.0000 42 504.00
11:40:33 12.0000 100 1,200.00
11:39:56 12.0000 100 1,200.00
11:39:53 11.9900 1,074 12,877.26 XT
11:39:46 12.0000 100 1,200.00
11:39:45 12.0000 42 504.00
11:39:44 11.9900 157 1,882.43
11:29:40 11.9900 42 503.58
11:17:30 12.0000 42 504.00
11:11:36 12.0100 62 744.62
11:11:36 12.0100 100 1,201.00
10:56:42 12.0900 9 108.81
10:56:42 12.0500 33 397.65
10:51:15 12.0500 42 506.10
10:44:13 11.9000 349 4,153.10 XT
10:44:13 11.9500 51 609.45
10:43:08 12.0500 200 2,410.00
10:33:05 12.0500 42 506.10
10:22:53 12.0000 160 1,920.00
10:04:04 12.0000 189 2,268.00
10:04:04 12.0000 1 12.00
10:03:45 12.0500 750 9,037.50
10:03:45 12.0500 325 3,916.25
10:03:45 12.0500 608 7,326.40
10:03:45 12.0500 158 1,903.90
10:03:45 12.0500 42 506.10

 

[Wysiwyg]

Manipulating the Market

Call me cynical but I can't help but think/know that the market is manipulated by the big end of town.

Here is a tactic apparently used to get cheaper prices. No law against it I suppose so if one falls victim to being shaken out then there isn't much that can be done about it. To be a fly on the wall. :eek3::eek3:

Here is a simple example of how an institutional trader might manually execute an order for the purchase of 1 million shares. Let’s say the stock closed the previous day at $40/share. The morning the broker receives the buy order he may offer 5 or 10,000 shares at 39.90 or lower while simultaneously bidding for shares at a lower price.

The first trick this broker may use is to show the full size of the offer while only showing 100 shares bid with a larger number of shares “in reserve” meaning that he may be really bidding for 5000 (or any other number they choose) shares. By showing a larger number of shares for sale and a small amount of demand in the pre-market, the broker may induce weaker holders to sell their shares in fear that there could be a real seller looking to get a head start on their selling that day. This type of activity is pure manipulation and it happens all the time!

 

[beaul]

I have been watching a particular stock for some time, small cap (under $20 million) and for no apparent reason if went up sharply and just as sharply after 3 days, came down again.

I thought, later that this may have been manipulated to force up the stock and then get out quick at the higher price generated.

I am sure this sort of thing happens all the time but what signs are there to look for, when you think this may be happening.

 

[Naked shorts]

I have been watching a particular stock for some time, small cap (under $20 million) and for no apparent reason if went up sharply and just as sharply after 3 days, came down again.

I thought, later that this may have been manipulated to force up the stock and then get out quick at the higher price generated.

I am sure this sort of thing happens all the time but what signs are there to look for, when you think this may be happening.

This may have been a short squeeze, one thing to look for is stocks that have a high short interest.

http://www.asx.com.au/data/shortsell.txt

Also, visit page 18 of this newsletter, it has a recent study of the effects that the short interest has on stock prices. They find that stocks on the ASX generally increase in price when short interest increases.

http://www.aima.org/download.cfm/docid/234CC5A2-A424-49F3-9CCD983A01CF17CC

Also depending on your trading platform, you can set alerts to notifiy you when a small cap is having quite an active day (normally the start of some kind of run up).

 

[yonnie]

netquote.com.au is what you want to have to see the big moves.
free registration

 

[Wysiwyg]

This may have been a short squeeze, one thing to look for is stocks that have a high short interest.

I don't know of any CFD provider that allows "small caps" to short sell. This certainly would not have been the case in Beaul's query.

 

[Naked shorts]

I don't know of any CFD provider that allows "small caps" to short sell. This certainly would not have been the case in Beaul's query.

Who said any thing about CFDs?

 

[Wysiwyg]

I don't know of any short selling facility that has "small caps" to short sell. This certainly would not have been the case in Beaul's query.

Got any obs. with that?

 

[quinn123]

Has anyone here manipulated a share price to accumulate/distribute stock? I think its pretty easy to do a shakeout in small cap stocks with a little capital behind you. Something like a test to see if the sellers have gone or try and hit some stops to pick up more stock at cheaper prices. It is legal isn't it?

 

[tech/a]

Has anyone here manipulated a share price to accumulate/distribute stock? I think its pretty easy to do a shakeout in small cap stocks with a little capital behind you. Something like a test to see if the sellers have gone or try and hit some stops to pick up more stock at cheaper prices. It is legal isn't it?

How exactly are you going to do that if you dont own a crap load of the stock in the first place?

 

[quinn123]

Point taken.

Although say you were incredibly bullish on this particular stock and you accumulated that many shares that you could effectively manipulate the share price for a couple of days. I know this is an unlikely scenario for the average joe and would probably only happen in penny dredfuls and in unusual, possibly illegal circumstances. But it would be nice to have that much power that you could decide what price you would like to buy/sell the stock at (for a couple of days anyway).

I realize this will probably never happen but I can dream.

PS You wouldn't have to own any stock to mark the price up in order to short it if you were bearish. Just use leverage, mark it up, then hedge with your short order.

 

[Naked shorts]

Has anyone here manipulated a share price to accumulate/distribute stock? I think its pretty easy to do a shakeout in small cap stocks with a little capital behind you. Something like a test to see if the sellers have gone or try and hit some stops to pick up more stock at cheaper prices. It is legal isn't it?

It happens every single day with everything. What do you think execution traders do all day?
I do think there are limits however to what you can do, but its all legal and so it should be because what they are doing isn't really "manipulation". The people who put their stop losses at technical points (for example) are not forced to put them there, they aren't forced to exit their positions when price hits that point, they aren't forced to risk their money in the market in the first place. What you do with you money is your choice.

 

[nunthewiser]

Yes it happens.

Yes i deniably know of it happening .

Low cap stocks ,illiquid stocks...... patience and jittering the depths EVEN on the buy to spook ppl with the larger bids removed on a sudden basis on vols created by oneself on any smaller holdings one has grabbed along the way for this purpose..

then seen sell stacking the depth with the odd small sells to get the ball rolling while the patient buyer inserts varying individual AVERAGE to smaller sized orders throughout varing depth lines at the point one wants there average major buy at.

it IS illegal and the drunken unknown dero that told me has now found true love in a skimpy barmaid named Nikki and cant even remember what happened yesterday let alone some drunken rambling from way back.