Investing, Personal Finance, and Credit

What Is A Pump and Dump Scam

by Sarah
(Canada)

What is a pump and dump scam? Please explain clearly. Thanks a lot.

Comments for
What Is A Pump and Dump Scam

The stock market moves up and down because of supply and demand. Simply put when more people buy a stock then sell it the stock goes up. When more people sell a stock then buy it the stock goes down.

There are a lot of scam artists out there who try to take advantage of this by getting into a stock and then hyping up the stock on the radio, television, etc. Just to get more people to buy it and push the price higher.

Once the price has gotten higher they these scam artists sell their shares for a profit and leave everyone that got in from the hype to slowly lose their money as the market brings the stock back down to a realistic level.

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