What is Pump and Dump in the Stock Market?

★ SUMMARY ★
Purchasing a stock that’s being pumped up by hype is going to give you a recipe for disaster…

Pump & Dump Concept
What does the Pump & Dump concept mean to you when it comes to your trades? More importantly, what does Pump & Dump mean?

It means that a group, entity, or person is pumping up the stock then selling it once the price is higher. They are looking to exit their position.

They try to pump the stock price up by sending newsletter lists, emailing people, posting to online message boards and chat rooms, or even posting on social media.

Years ago, I received these same messages claiming, “Stock XYZ is going to go up 1000%, because they are inventing a new amazing drug or company – it’s only $1 per share now!” A lot of pump & dump happens when it comes to penny stocks or stocks that are trading for cheap per share.

These people have purchased a certain amount of stock and are now trying to pump that stock up – whatever means necessary…

Posted at: http://tradersfly.com/2014/11/pump-dump-stock-market/

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27 COMMENTS

  1. What if a person continuously promotes a stock so the stock price stays up, such as a dividend yield? (Not pump and dump, only through truthful means, such as telling people to buy it so their dividend will go up if everyone buys it)

  2. I love pump and damp
    I get in when the pump start then I get ready to exit
    It's easy gain.
    I bought 40 k shares of Ammj stocks for 0.10 then sold 2 weeks later 0.65 a total of $22 k profit in 2 weeks
    Just don't get fucking greedy price goes up dum right away and don't go back in find not pump and dump and get in at the begging,be patient it will get pump.
    Easy money $$$

  3. so true. So rather go long using fundamental analysis if less than 25k. Then you can do these kind of trades in video when over 25k. Or what do you think? most pump and dump stocks are high votality.

  4. i have a question. if ur fooled into buying penny stocks but at 10 cents or less per share and u buy a 1000 dollars worth, are you even losing money? because what are the chances that it will go lower than 10 cents? arent the people who first start out buying shares at very low prices in benefit because it is likely that it will always go up?

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