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…
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