share price manipulation

[SimonPB]

So I see people complaining about share prices being manipulated again .. well tis real simple, put your money were your mouth is and lodge an official complaint with the JSE. Call them and ask for the surveillance department.

[#2]

I never understand how small time traders (ie us in the forum unless someone has a few hundred million in their ccount) can spot a share manipulation? Surely selling/buying 1 share at a higher or lower price is just using the market to your advantage? Maybe just a simple case a triggering a stop or trying to test a new resistance and support level. Even in business and life you take a chance to to 'manipluate' the outcome to your advantage if you can. Will it make you millions in a single trade or even over a month? You had better have massive amounts of insider knowledge to manipulate a share to that extent, and dont forget the cash to back it up. OMO

[richardw]

If it was something they wanted to watch for they could easily have a bot looking for 1-share trades, or repeated trades. If it hasn't dawned on them by now then I'll assume they're working hard enough keeping the trading system running. If you think it's beyond them to figure out the pattern, I'll happily consult.

[richardw]

The issue I mentioned was around 30 1-share trades of Datatec in a row, hitting the top of the bid-offer spread, after the share had been dropping most of the morning. Now my best guess is they're propping the share up by ensuring the ticker reports the top value. Why? Who knows. Maybe someone was keeping it above their stop-loss or was just preventing a panic drop. Is there an alternative possibility, like someone's kid keeps hitting the buy button?

There are two issues here. 1) Is this manipulating the price? Depends on your definition of "manipulating". I think so, because it seems like their focus is only to affect the price. 2) Is there a rule against it? If so, then yeah - those people should get some kinda penalty. If not, then why don't we all just get together and do that to a smallish share? Hey, big money. Drive it down, then drive it up. Pretty much stealing the money of anyone who gets involved, but hey if there's no rule...

[SimonPB]

the JSE is the only exchange in the world with real time surveillance .. question is why is a 1 share trade a sign of manipulation ??

[richardw]

see above

[SimonPB]

hold on, a 1 share trade manipulates the price until the next trade .. sure it may con some dim person, but anybody actually looking at what's what won't be conned .. so if you really want to manipulate a price bring some billions to the table, and as soon as they are finished expect the price to return to market values ..

[richardw]

Agreed - unless someone just sees the latest price and hits "@Market", and loses a bunch of cash because they stick at the 1-share trade price.

Question...why would they do it if it didn't work? It happens a lot. I guess it works. Another issue is proving intent, which is obviously harder.

[SimonPB]

that makes no sense to me .. the 1 share trade happened at best offer/bid .. so makes no difference for the @market trade ?? they'll just hit the best bid/offer ..

[richardw]

Sorry, that's when someone leaves a 1-share buy/sell that's close to one edge of the spread. That will catch @Market. But it's also just a guess, which I haven't heard many alternatives for yet.

And about the "until the next trade". Obviously if you try it with Anglo it'll do nothing because it's no time til the next trade. But a less-traded share with wider spread is perfect for playing games, which is why it happens. Again, alternative possibilities welcome.

[SimonPB]

so lets assume you're right (I dispute that, but we're going around in circles) .. so you have spotted it and understood it, question is then how do you profit from it ??

[#12]

I would be able to profit from it, if I could short Datatec. I buy 1 share at the top of the bid/ask - in the hopes of triggering a couple of stops, which would then buy up the rest of the shares on offer, then I enter short? in theory of course. My guess is it would only work in low volume days, with a big bid/ask spread

[richardw]

Well, I figure if they're pushing it up, then it should be higher than it would naturally be. So take advantage of the higher price to short it. Put your trade in front of their buys and you'll hoover up their bids. I added a short on Datatec when they were pushing it up, and it dropped a bit later.

[HungryPunter]

If you do spread betting, some of the prices are calculated at the mid point of the sell and the buy, not the last price traded. So if there is a wide spread on the JSE and I narrow the spread with a 1c then I place a significant leveraged trade on the spread betting site. I remove my 1c and I have an instant profit.

[HungryPunter]

If you do spread betting, some of the prices are calculated at the mid point of the sell and the buy, not the last price traded. So if there is a wide spread on the JSE and I narrow the spread with a 1c then I place a significant leveraged trade on the spread betting site. I remove my 1c and I have an instant profit.

[richardw]

Sneaky :)

[SimonPB]

well no you don't .. costs ..

[#18]

Agree with Simon, you can't win with the bid/ask because of costs. But Simon, my scenario is still theoretically sound though? Providing of course that there are stoplosses hiding close to the ask price?

[SimonPB]

in theory .. big IF about the stops .. an then the Q is, is this price manipulation ?? just because somebody put their stops in a lazy place ??

[#20]

No, it is not. i was merely answering if I could profit from it.