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In practice, it is far, far more common for bad actors to run the pump and dump than to short and issue fake news. The latter is rare enough that we don't have
by romed 8y ago
In practice, it is far, far more common for bad actors to run the pump and dump than to short and issue fake news. The latter is rare enough that we don't have a word for it. The former is common enough to be called "pump and dump". There's a good reason why shorting is not a common scam technique: your gains are capped at 100% and your risk is unlimited. On the long side, it's the opposite. A pump-and-dump has unlimited upside and the you can only lose 100%.
- codewell 8y agoThe short version is called short and distort. I'd like to see stats on which is more common.
- romed 8y agoI was an investment professional from 2001 to 2009 and I never heard anyone say "short and distort". https://books.google.com/ngrams/graph?content=%22pump+and+dump%22%2C%22short+and+distort%22&year_start=1800&year_end=2000&corpus=15&smoothing=3&share=&direct_url=t1%3B%2C%22%20pump%20and%20dump%20%22%3B%2Cc0 https://books.google.com/ngrams/graph?content=%22pump+and+du... "Ngram not found: short and distort"
- codewell 8y agoPerhaps it's a newer term. Now "short and distort" is around, for instance prominently as section 3 in the wikipedia article on "pump and dump" [0], and investopedia [1] also describe it. [0] https://en.wikipedia.org/wiki/Pump_and_dump https://en.wikipedia.org/wiki/Pump_and_dump [1] https://www.investopedia.com/terms/s/shortanddistort.asp https://www.investopedia.com/terms/s/shortanddistort.asp