By rlds, 16 September, 2021
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Stock market manipulations

Fluctuations in stock market are no longer predicted by financial analysts only, nor driven by the traditional demand and supply. To put it simple - financial analysts today are those, who actively monitor the media and other relevant data, and not only those, who parse 10-K reports.

Stock market could be based on prospects, fear and hype - therefore, there are many of those, who would try dissuade or aspire you to do certain actions. Recently (2020-2021), we have witnessed how market manipulations awakened with certain blue-chip stocks like Tesla, Facebook, Virgin Galactic, etc. as well as with cryptocurrency in general.

Passive stock market manipulators

Big companies could be unknowingly producing fear or confusion in their public announcements. Initiating corporate mergers, product change, re-branding - everything big players do differently, affects the drop. Such market players can easily create almost any agenda with a favourable outcome.

Clients are always vulnerable, because you have given your money to them, what do you expect?

Who could be a passive stock manipulator?

Any major international bank, insurance company or an investment group, that could easily sell or move their assets, in order to change the demand. Fat purse doesn't need to swindle much.

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Active stock market manipulators

Such financial experts (and media outlets) are sponsored well - majorly being subsidiaries of bigger banks (passive players), who infiltrate their strategy of stock market trends. These folks are pushing - they need to know your purse, your demand and your search logs. They invoke your interest. Minor stock market fluctuations make millions for them with your assets. Consultants and salesmen don't care!

Who could be an active stock manipulator?

Those, who are desperate to get to the top. Average broker companies, private funds, hedge funds, mutual funds, corporate spokesmen, news media, etc combine report-driven approach, aiming at stock holder purse of their entities.

Cheater companies

Some classic examples of how companies were selling 'moods', in order to get their sponsoring funnelling:

  • Enron
  • WorldCom
  • Theranos

and other biggies, who thrived mainly on investor relations by selling promises, or fakes - are the example of a direct, criminal fraud. Tampering annual reports, financial documents and other mandatory data. 

Susceptible stocks

Some assets eventually get sunk if they are in the category of:

  • underrated stocks
  • 'disgraced stocks' (fallen in favour)
  • labelled companies
  • companies under litigations
  • over-valued IPO's (companies)

Underrated stocks and insiders behind them

Underrated stocks traditionally include: pharma, oil & gas, retail and many other conservative stocks, that have a great capitalization and quite average performance. Such companies are easily vulnerable to any public disgruntlement - everything could drive them down.

Lost prime companies: Xerox, General Electric, AT&T, Kodak, Nokia, etc, may have an under-valued score, due to lack of innovation or a stalemate philosophy. Fallen out of favour big companies, sometimes return.

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High-frequency trading

The new player on the stock exchange is no longer a human. High-frequency trading (HFT) done solely by AI algorithms are pumping stock prices physically, on the basis of nanoseconds. Such hyper trades between AI accounts create an artificial demand, driving the real human interest down. A stale market of AI traders is apparent.

HFT substitutes the traditional human analysis with the fast number-scalping automation, which means: you will have mainly pick blue-chip stocks and set the fluctuation range for the AI. Watching the price change at least for 0.2%, which could be done 10-1000 times during the trading day, scalping lofty amounts. Monitor the HFT process and set other algorithms or pick different stocks.

HFT brokers are already available for you in 2021. HFT is not a fraud, nor a manipulation (unless its algorithm is specifically set for that), but it's an advantage, that could easily create an artificial price spike.

The tools of influence change

The social media, on the other hand, can easily produce an intentional hype crescendo (that's its main role, isn't it?). Media coverage affects investors, politicians and even HFT research bots - it's apparent. Bitcoins, Dogecoins, TikTok, financial advisers, Twitter's celebrity shout-outs, Facebook's fake news, or fake accounts, etc - all that alone, was involved actively in the stock market shifts in 2020-2021.

Conclusions

Whether, traditional or high-tech - the stock market strategy remains subjective and human oriented, especially for those, who have learned how to make money. Misinformation and manipulations are all time active and get more sophisticated in terms of convincing people, hence giving humans no chance, but to perfect their own skills of information mining, research and analysis.