What does a pump-and-dump stock mean?
Asked 4 years ago
What is pump-and-dump, and what qualifies as one? And, while we're on the topic, how do you tell if a stock is a pump-and-dump?
Andia Rispah Igobwa
Thursday, October 14, 2021
In a pump and dump scheme, fraudsters create a buying frenzy by spreading false or fraudulent information in order to "pump" up the price of a stock and then "dump" shares of the company by selling their own.
When the fraudsters sell their shares and cease advertising the stock, the stock price typically falls and investors lose money.
The spread of false or incorrect information about a firm's stock price may occur through channels such as social media, investment research websites, online advertisements, investment newsletters, email, direct mail, Internet chat rooms, magazines, newspapers, and radio.
Microcap firms, in particular, are vulnerable to pump and dump schemes due to a lack of publicly available information about them.
Please follow our Community Guidelines
Related Articles

The Best Trading Platforms for Cryptocurrency
Filip Dimkovski
May 25, 2021

Fortrade: A Forex and CFD Trading Platform Review
Filip Dimkovski
July 23, 2021

The Fundamentals of Forex Currency Exchange Trading
Filip Dimkovski
August 5, 2021
Can't find what you're looking for?