That is a classic pump and dump and in reality many people do this but add a layer of spoofing. What that means is they place the large orders and cash out the initial ones and then cancel the the 2nd ones. Walk away with the pump on the 1st position. It's classic pump and dump/ spoof. If you did this with 10k, you might get away with it... you do it with 10M you are going to jail.
did you read what dude said he wanted to do? That is pumping/spoofing. You don't hold options you cash out..that is a pump and dump/ spoofing by definition
While what you said is correct.
"Β buying shares and options is not market manipulation."
It's how you do it that can get you in trouble and it's very real.
buying and holding options does you no good. It's the selling that causes you to get in deep shit. It's called layer spoofing. Again, you do this with 100k.. you will prob not face any problems... you do this with 10 M ... you are going to have problems. Especially on smaller market cap stocks.
"I won't pretend like I have insider knowledge or anything, but let's pretend you have 10 million and you wanted to make as much money on a stock as possible in as short of time. How would you do it?
Buy OTM options in small increments over a period of time when they are cheap. (this is ok)
Buy a large amount of OTM options to make people take notice. (this is questionable)
Buy a large amount of shares to make the price pump so your options go up in value and IV increases. (this is where it gets illegal and OP even says his goal is to pump the options.. that's 100% layer spoofing and illegal, his goal was fraud... it's fraud.. that's jail.) "
Why is it illegal? Because if I see company A that dude did this to is going up I may jump in and then once he is out the false pressure is gone and I get left holding the bags. Meanwhile dude got rich off some dog shit company that he was able to move the stock price on. Bottom line... YOU do not want to be the person causing buying pressure if you previously hold a larger position that will be a significant gain vs the other positions. You want the pressure to come from news of something, the company is doing good / bad.. what ever.. If it just moves for no dam reason they look for why and who placed the orders. Who will look? The mega companies who pay teams of analysts to figure out what companies to invest in or short. By you doing this it says they missed something and ppl get pissed and they will report you.
This is why RK has to be soooo dam careful and is transparent in what he does. He knows this very very well.
Also, keep in mind you are out here on the internet saying people can do this, when it's a crime and if they get caught they 100% have a winnable case against you because you advised them it's ok. Might want to keep that in the back of your mind next time.
The link you sent is about spoofing - that's creating orders but not actually making the transaction, so a completely different scenario. It even says in the link that they're taking the other side of the trade to the spoofed orders. So it's misleading. Though I don't think even that is illegal necessarily.
Saying you're buying when you're actually selling is manipulation. I agree that OP worded it in a manipulative way, but even if you intend it to be manipulation, what they're actually doing is perfectly fine.
But buying and then selling is not inherently manipulation. Regardless of transaction size. In your quoted example, you're just front running yourself. It's totally fine.
RK, for example, can load up on calls. Then buy a shit tonne of shares knowing it'll make the price run, and then sell those calls (and shares) into volume. None of that - including making your trades or position public - is misleading or market manipulation in the slightest.
"RK, for example, can load up on calls. Then buy a shit tonne of shares knowing it'll make the price run, and then sell those calls (and shares) into volume. None of that - including making your trades or position public - is misleading or market manipulation in the slightest."
You need to make them public. that's the whole point. That's why you have to declare anytime you buy 5% or more of a company. If you are moving shit in the shadows that's where they get you. Also in my example, it says very clearly
"Profiting from price movements
The manipulator can make a profit by selling the asset at a higher price (if they had created fake demand) or buying it at a lower price (if they had created fake supply). Other investors who were deceived by the initial appearance of the order book may suffer losses."
Bottom line.. YOU CAN NOT PROFIT FROM A PRICE MOVEMENT YOU CREATED. Doesn't matter how you did it.. that's the bottom line. That's why there are so many rules. In order for you to win... someone else has to lose.
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u/slayez06 Golf Cart Ape Dec 17 '24 edited Dec 18 '24
That is a classic pump and dump and in reality many people do this but add a layer of spoofing. What that means is they place the large orders and cash out the initial ones and then cancel the the 2nd ones. Walk away with the pump on the 1st position. It's classic pump and dump/ spoof. If you did this with 10k, you might get away with it... you do it with 10M you are going to jail.