Friday, January 29, 2021 2:33:18 PM
This explains it pretty well:
Why do many market manipulators make the price of stock go down instead of up?
Market manipulators make the price of stock go down for exactly one reason: they want to be able to buy large amounts of it.
If a market manipulator starts buying large amounts straight away, their buying will move the stock price higher - that's not a good outcome, as by the time they've bought all the stock they wanted to buy, the price could have gone appreciably higher and the profit they were hoping to make has disappeared before they finished buying. That isn't what they want to happen; they want to buy it as cheaply as possible.
To do this, they will often sell some first to try to achieve several different outcomes. Consider this:
if the manipulator sells significant quantities of a stock and the price goes down, then other players will be spooked and will start to sell their stock as well. The manipulator can try to quietly buy back this stock without being noticed, and without pushing the price back up again
if the manipulator sells significant quantities of a stock (let's say 100,000 Apple shares) and the price DOESN'T go down, then that means someone else out there must be buying similar amounts of stock as it comes onto the market. Now that buyer won't be someone like you or I - we don't buy 100,000 Apple shares at market. It HAS to be another market manipulator. That's an important piece of information for the first manipulator to have - "some other big player wants this stock, so prices are likely to go higher..."
as the price of a stock starts to move higher (as the first manipulator keeps buying it, supply will start to become less, so the price will inevitably start to rise), you often find the manipulator then starts selling again. Why? Two reasons:
He wants to know if the other manipulators out there are still interested in buying the stock. If so, then the price shouldn't fall by much; the other manipulators will be buying up the stock that the 1st manipulator is selling. That's what the 1st manipulator wants to see happening; he needs other big players to help drive prices higher, as otherwise there will be no-one for him to sell to later on
The manipulator also wants to know if there's other unsophisticated stock holders out there who are on the point of selling, who could be convinced to sell if the price starts going down again. Price moves down; those unsophisticated stock owners sell their stock; manipulator gets to buy them without moving the market, and at a cheaper price than if the market had kept moving up. Once the manipulator has consumed all the supply of stock out there, anyone who wants to buy can only buy from the manipulator, who can then start to raise the price
Why do many market manipulators make the price of stock go down instead of up?
Market manipulators make the price of stock go down for exactly one reason: they want to be able to buy large amounts of it.
If a market manipulator starts buying large amounts straight away, their buying will move the stock price higher - that's not a good outcome, as by the time they've bought all the stock they wanted to buy, the price could have gone appreciably higher and the profit they were hoping to make has disappeared before they finished buying. That isn't what they want to happen; they want to buy it as cheaply as possible.
To do this, they will often sell some first to try to achieve several different outcomes. Consider this:
if the manipulator sells significant quantities of a stock and the price goes down, then other players will be spooked and will start to sell their stock as well. The manipulator can try to quietly buy back this stock without being noticed, and without pushing the price back up again
if the manipulator sells significant quantities of a stock (let's say 100,000 Apple shares) and the price DOESN'T go down, then that means someone else out there must be buying similar amounts of stock as it comes onto the market. Now that buyer won't be someone like you or I - we don't buy 100,000 Apple shares at market. It HAS to be another market manipulator. That's an important piece of information for the first manipulator to have - "some other big player wants this stock, so prices are likely to go higher..."
as the price of a stock starts to move higher (as the first manipulator keeps buying it, supply will start to become less, so the price will inevitably start to rise), you often find the manipulator then starts selling again. Why? Two reasons:
He wants to know if the other manipulators out there are still interested in buying the stock. If so, then the price shouldn't fall by much; the other manipulators will be buying up the stock that the 1st manipulator is selling. That's what the 1st manipulator wants to see happening; he needs other big players to help drive prices higher, as otherwise there will be no-one for him to sell to later on
The manipulator also wants to know if there's other unsophisticated stock holders out there who are on the point of selling, who could be convinced to sell if the price starts going down again. Price moves down; those unsophisticated stock owners sell their stock; manipulator gets to buy them without moving the market, and at a cheaper price than if the market had kept moving up. Once the manipulator has consumed all the supply of stock out there, anyone who wants to buy can only buy from the manipulator, who can then start to raise the price
Trust, but verify - Ronald Reagan
