What Is Stock Manipulation?

Many investors believe that short sellers are the only ones that affect the stock markets price fluctuations, but big buyers also affect it, along with every other investor in the stock market!

Bullish Market Manipulation

Bullish Manipulation happens when traders/investors with huge buying power purchase an enormous amount of shares of a company’s stock. When a bullish investor wants to make some easy cash or they see the stock heading in the opposite direction of their entry price, they will buy a very large amount of shares. This increases the stock price dramatically in a short period time. The same rule applies when investors are selling a massive amount of shares.

Bearish Market Manipulation

Selling is another factor that can affect the stock market prices and any particular stock. If a bearish investor wants to make a profit off of selling shares of a stock they think is going to dip, they can short sell. The stock price can decline if an investor who holds a huge amount of shares decides to sell them. Stock price will also fluctuate from investors and stock traders who buy and sell stocks out of fear and excitement.

Fear Selling And Excitement Buying

Traders and investors tend to get excited when they see good news articles, dramatic price increases, and spikes. This makes them impulsively buy shares, driving the stock price higher. When a bad news article comes out or if a stock appears to be declining at a quick rate it imposes fear in other shareholders making them sell their shares, devaluing the company’s stock and causing the stock price to dip even more.

 

Thank you for reading!

I’ll be talking about the legality of stock manipulation in my next blog post! Don’t forget to check out some of the great books down below!