Short sellers’ toolbox What Is a short ladder attack?
It is a form of market manipulation where an organized group of short-sellers (people who have bet a stock will go down) sell small numbers of shares to each other at successively lower prices to “paint the tape”—meaning to create a series of reported prices trending down that will scare other investors into selling—thus helping their short bet to win.
What Is a short attack?
A short attack is a carefully planned and coordinated attack by a group of short sellers that involves taking a large short position in a company then attempting to drive the share price down by the release of biased negative information. This information can be released in a variety of ways including via a discussion paper, in the media, via “independent” analysts’ reports or on message boards and blogs. Often, these tactics are employed in combination for maximum effect.
What Is a Shakeout?
A shakeout is a situation in which many investors exit their positions in a stock or market segment at the same time, often at a loss. A shakeout is usually caused by short sellers spreading fear, uncertainty and doubt. Shakeouts can be quite variable in duration, but they are usually sharp in terms of the amount lost from recent highs.
A shakeout can also refer to stronger companies in an industry using their capital reserves to acquire or eliminate weaker competitors that have overextended themselves.
What is stop hunting?
Stop hunting is a strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set stop-loss orders. The triggering of many stop losses at once typically creates high volatility and can present a unique opportunity for investors who seek to trade in this environment.
The volatility creates opportunities for traders to open a long position at a discount or pile onto a short position
What Is wash trading?
Wash trading is a process whereby a trader buys and sells a security for the express purpose of feeding misleading information to the market. In some situations, wash trades are executed by a trader and a broker who are colluding with each other, and other times wash trades are executed by investors acting as both the buyer and the seller of the security.
Wash trading misleads investors into believing that trading volumes for a security are higher than they actually are.
What Is a Jitney?
The term is used to refer to a type of market manipulation in which brokers trade securities back and forth with one-another in order to earn commissions and artificially produce the appearance of high trading volume.
In this case it defines some brokers that collude with one-another to exploit their clients and other market participants through various schemes.
What Is P00P&SC00P?
“poop&sc00p” occurs when a group of short sellers attempts to drive down a stock's price by spreading false information, rumors, and otherwise damaging and deceitful information (“1p00p”) in order to then buy the stock at a lower price (“2sc00p”). If they are successful, they can purchase the stock at bargain prices, as the overall marketplace will have sold off the security, causing the price to fall dramatically. “p00p&sc00p" is generally frowned upon by securities exchange regulators and can be prosecuted by the SEC.
What is short and distort?
Short and distort refers to an unethical and illegal practice that involves investors shorting a stock and then spreading rumors in an attempt to drive down its price. Such a practice, most often employed by stock manipulators who trade daily via the internet, involves the spread of unsubstantiated rumors and other kinds of unverified negative news designed to help them realize a profit on their short position.
Short and distort can be contrasted with a pump and dump scheme, whereby the perpetrator takes a long position and then spreads misinformation to drive the stock price up.
What is FUD?
FUD stands for “fear, uncertainty, and doubt” and refers to a general mindset of pessimism about a particular asset or market, as well as the manipulation of investor or consumer emotions so that they succumb to FUD.
What Is market capitulation?
Let us define what a market capitulation is to understand how short sellers are trying to force some to sell in panic so that they can cover their short positions.
The posts on this board are mostly from short sellers trying to plant the seeds of fear, uncertainty and doubt.
When prices in a market fall, the first instinct of many investors is to hang on and wait for values to recover. But if a slide goes on long enough, fear of deeper losses can outweigh such hopes. When enough investors reach that breaking point and sell, the result is called market capitulation.
What Is a bear raid?
A bear raid is an illegal practice of colluding to push a stock's price lower through concerted short selling, while spreading negative rumors about the shorted company. A bear raid is sometimes undertaken by unscrupulous short sellers who want to make a quick buck from their short positions, leveraging social media platforms and online message boards.
What Is painting the tape?
a form of market manipulation whereby market players attempt to influence the price of a security at the expense of investors by buying and selling it among themselves to create the appearance of substantial trading activity .
The goal of painting the tape is to create the illusion of an increased selling pressure in a stock to trick investors into selling shares, which would drive the price lower.
What Is marking the open/close ?
a market manipulation practice that involves making multiple trades minutes before the open or at the closing of the market in order to manipulate the price of the stock. This type of manipulation is also referred to as « stuffing » or « owning » the stock used by short sellers to establish an artificial price that will push investors to panic and sell by stirring their fear emotions.
What Is spoofing ?
a form of market manipulation in which a trader places one or more highly-visible orders but has no intention of keeping them (the orders are not considered bona fide). While the trader’s spoof order is still active (or soon after it is canceled), a second order is placed of the opposite type.
For example, a short seller places a large sell order, only to cancel it and place a buy order. The sell order drives the price of the stock down, while the buy order takes advantage of the lower price. The spoof sell order allowed the trader to execute the buy trade at a better price than if the spoof sell order had not been placed.
What Is psychological warfare?
Psychological warfare (PSYWAR), or psychological operations (PsyOp) involves the planned use of propaganda and other psychological operations to influence a target audience’s belief system, opinions, emotions, motives, reasoning, attitudes, and behaviour. Fear mongering for example is used to induce behaviours favourable to the predator at the expense of the prey.
What is Bluffing?
to deceive someone by making them think either that you are going to do something when you really have no intention of doing it, or that you have knowledge that you do not really have(short sellers speculating about the future), or that you are someone else (short sellers posing as longs)
What is Feinting?
a deceptive or pretended blow, thrust, or other distracting movement, especially in boxing or fencing.