Operators In Stock Market

Operators In Stock Market, How Operators Manipulate Stocks
Operators In Stock Market, How Operators Manipulate Stocks

Have you ever heard about stock market operators or stock price manipulation? maybe from a friend or in news? So, who are these Operators and how do they do so?

In this article, We will discuss operators in the stock market & we are going to answer all these questions and try to cover all aspects of stock operating activities. Stay tuned until the end

Who are the Operators in the Stock Market?

Stock market operators are the market participants who manipulate the price of a stock for their personal gains or profits. They can be a cartel of brokers or speculators and even company insiders are found to be guilty sometimes.

They do it by their well-known “Pump and Dump” scheme. These operators manipulate stock prices higher or lower according to their planning and create a fake scenario in the stock.

This process continues till the volumes expand and the price goes up or down substantially.

Investors and Traders influenced by these rapid price movements take their position in hope of quick money. Meanwhile, at the time when stock operators have made enough profits, they exit their position and eventually create a crash scenario.

Continuously hitting lower circuits day by day traps the rest of the investors in the stock. The absence of buyers let the stock down and more down. In the end, Operators enjoy their profits, and investors have lost their money in hope of making good returns in a short time.

Types Of Operators In The Stock Market

There are various types of operators in the stock market who influence the prices of shares or stocks which are as follows:

1. Brokers: these are members of the stock market who trade i.e. either buy or sell securities or stocks on behalf of their clients/investors for which that market participant or broker charges commission for his services.

2. Bulls: these are kinds of speculators who expect or predict the prices of stocks and also they buy shares or financial instruments to sell them in the future at a higher rate.

When the price rises as per their expectation, it is known as a bull market and when the prices fall, such market participant has to then, sell such shares at a loss which is known as bull liquidation.

3. Bears: these speculators who predict the fall in the price of securities. Their strategy is to buy the security at a lower price with an expectation of a fall in price before the date of delivery to an investor whom he has promised a future delivery.

Simply, these types of operators expect the fall in the price of the market and decide to sell such stock with a promise of future delivery but they themselves buy such stock at a lower price as per their expectations just before the date of delivery.

If the prices fall as per their prediction, it is called a bearish market and if the price goes high, it is known as bear covering.

How Do Operators Manipulate Stocks?

These market participants or operators in the stock market use various types of strategies or tricks with respect to where to invest.

These operators in the stock market will always manipulate the decision of a person who is desiring to invest but the last decision relies on the person himself; for sure, these operators in the stock market would influence once the decisions of a person.

The simplest and very general strategies used by such stock market operators is to buy at low prices and then sell it at high prices.

In a simple way, these operators of the stock market first buy a stock or security at a low price then they, by way of making it popular or attractive attracts other investors to invest in it.

When any investors enter to buy such stock, these stock market operators take a silent exit, enjoys money or profit they earned, and head towards the new stock.

How To Find Operators Driven Stocks?

1. Alert with Mid or Small-capitalization companies: As discussed above it is difficult for operators to manipulate the stocks of large-cap and blue-chip companies.

These operating activities are rarely seen in large-cap stocks. Even insider trading activities are more frequently observed than stock operating activities in blue-chip stocks.

They mostly pick mid or small-cap companies because of their low liquidity and less capital requirement for manipulation. So it will be safer for investors to invest in large-cap industries.

2. Delivery Percentage: Sometimes the stock price is going higher, but the delivery percentage remains low. This shows that a lot of trading activity is being done in the stock.

It is not a sure factor that the stock is operator driven but because the long-term investors are more focused on long-term gains these high-volume stocks are not preferable.

3. Sharp movements: If you are active in the markets then you have definitely observed the sharp movements, gap up or gap down movements in some stocks.

It is okay sometimes because news affects a lot to share prices. It can be neglected if there is an event or news, but there are a lot of stocks that show these rapid movements very frequently they move up to 10 % either up or down.

4. Figure out the history of the stock: History repeats itself so Scrips do so. The same principle applies to the operators. They try to manipulate the stock again at that price they last did. That’s why it is advisable that one should check and analyse the history of the stock.

5. Follow big Investors: This is a good technique to save yourself from operators. It is not advisable to copy big names of Mutual fund houses or foreign investors etc, and buy the share because they are buying, but to know which stock they are buying and avoiding is a good practice.

We have to admit that as retail investors, we have limited access to knowledge and resources compared to big Billionaire investors and huge corporations.

6. Analyse with Technical analysis: Technical analysis is one of the most commonly used analyses after Fundamental analysis in the field of the stock market.

A stock that is being operated generally does not show technical analysis. Instead, it moves rigorously. Technical analysis is mostly used by traders who hold their position ranging from a day to a few months.

If a stock is appealing good for investment with fundamental as well as technical analysis it gives an upper edge to the investor.

7. Check Promoters Holdings: Promoter’s holding signifies the faith of Founders and owners of the company in their own company. As high as the promoters holding safer the firm for investment.

There have been a lot of incidents where promoters were indulged in stock operating and manipulative activities. Most of them were consists of very small promoter holdings.

Also Read: How to do a fundamental analysis of stocks?

Who Can Become A Stock Marker Operator?

The answer to this question is very simple with the fact that stock market operators manipulate or influence the prices of stock for their benefit of own or for personal gain so, any person (includes any broker, or any firm or an individual or any other party) can be an operator in the stock market or secondary market or aftermarket who is having enough power of money with which he can either operate or move the stock.

Conclusion

These market participants or operators in the stock market are found everywhere and they strategize in such a way to earn personal benefit by way of influencing the prices of stocks.

So do a proper fundamental analysis of stocks, do not make your investment decision based on tips or news. Because who knows they may be stock operators.

If you believe your analysis and suddenly you see fluctuations in the share price then do not panic, be patient at that time. Also, beware of the person who is repeatedly recommending a particular stock to you.

I hope this article has helped you to know about stock operators, how stock operators work, how can you find them. Thanks for reading the full article Have a good day!!

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Frequently Asked Questions

Q. Do operators still exist in the stock market?

Yes, the operators in the stock market do exist as the brokers, speculators, and sometimes the company insiders. In the Indian stock market, one may find them very easily. Well, insider trading has been declared illegal or unfair practice under the regulations of SEBI

Q. Is stock operating illegal?

Yes, Stock Operating is totally illegal not only in India but in every other Stock exchange in the world.

Q. How to Identify an operator-driven stock?

1. In order to know if a stock or share is manipulated or not then, a person desiring to invest must go through to the indexes which hold that stock whether it is going up and your stock is going down then, it is clear that someone else is dealing with that stock i.e. that stock is being manipulated.

2. The stock shows red every time for no exact reasons, these operators sell enough securities to let it red during the pre-market. If we see an instance of wall street, the goal of wall street was just to destroy the stock in order to frustrate retail investors but not to the extent of attracting the attention of serious value investors.

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I love value investing, My goal is to create financial awareness in India For this I created a “unlockmyfinance” website and on this website, I teach people about finance & stock market

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