Pump and dump
Also called: pump-and-dump scheme
A manipulation scheme in which operators inflate a share's price with hype and then sell their holdings to the buyers they attracted.
Operators buy a small, thinly traded share cheaply, promote it through tips, social media and fake news while trading among themselves to show rising demand, then sell to the new buyers. When they stop, the price collapses and late buyers are left with large losses.
It is a form of illegal market manipulation, and SEBI takes action against such schemes.
Learn more in these lessons
- Pump-and-dump schemesHow does a pump-and-dump scheme work?
- Stock tip groups on Telegram and WhatsAppAre stock tips from Telegram and WhatsApp groups trustworthy?
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