How Spammers work in Stock Market?

Hello Investors,

        As and when there is up-gradation of technology, the chances of misusing the technology is always increasing and even with higher pace. In such conditions, we always need to be aware of what we are doing and whether we are falling as a prey to some of the spammers/cheaters. In earlier days, people used to give TIPs and I suppose that was a type of spam. Nowadays with so much increase of internet and getting access to information anywhere in the world, people can be misguided pretty easily. Also right now, a person who is active on FaceBook, Whatsapp or any other social media platform, we can consider him connected to at least 1000 people at  a time. Imagine the number of TIP that can be sent at a time. 

       Now the main point is that we do not fall in the trap of new type of spammers which can be really dangerous for all of the investors. It has been found that there are many pages on Facebook and other social networking sites wherein they lure users/investors to drop their mobile numbers for getting great trading ideas or tips daily.

        Any normal investors like me would check the profile and based on the comments and links will follow that page and drop the numbers on which Whatsapp is used. Mind you, many of the profiles from which the comments and likes are given are also fake. The operators are ready to give money for the same spam activity to the profile users.

        Most of the calls given by spammers have the volumes which are usually lesser than bluechips, a perfect characteristic for the stocks to be a multibagger. They give calls in morning most of which are only used for their own profits. Many of the operators are heard to be following similar tricks.

e.g.

If I am a spammer. I will buy a particular stock over period of a week and take handful of stock 'A' at average rate Rs 100.00

Now I am having handful of followers and the Page likes. Total combining to around 10000 followers. Believe me, its really possible to have so much followers. Tricks being making multiple pages and accounts. Also (Moneycontrol Message Board) MMB is misused like this. They will reach maximum person by sending the trading calls via

a) Whatsapp/ Whatsapp Groups.
b) Facebook Pages/Groups.
c) Moneycontrol Message Board (MMB)
d) Personal messages on the mobile number.

There will be 3 responses from the person who receives messages.

a) Will straightaway ignore the message and be safe
   
    Impact: Investors who chose option are mature and safe.


b) Will buy a little quantity for testing (With or without researching).

    Impact: Any normal investor with/without researching the stock will buy a little quantity. The spammers will HOLD on to the stock and the volumes will rise. So, now the investors feel like the call was right and they will soon see that they are earning basic profit. Now they will add more as per their capacity (This momentum will most probably be seen approx 10-15 days after the call was given by them).

c) Will wait for some days/trading sessions to check the behavior of the stock.
   
    Impact: After a week or so, the investors who were waiting for the stock behavior will feel that the call given by the spammers are right and they will most probably enter into the stock after approx 10-15 days. The timeframe similar to the ones in which the investors of 'option b' added the quantity. 
    Now due to all these volumes the stock will run up quite significantly above the average and its overall fundamentals. The spammers will start exiting after 15-20 trading sessions and you wont believe that the stock has already gained anywhere between 30-60% in 15-20 days. That profit is more than enough for any spammers who had done nothing but misguided the retail investors. 
    Now as the stock is already very much attractive in past few weeks, the buyers are always available as the stock comes into limelight which prevent the LC that can easily come when the spammers sell.

Continue to part II : http://shahstocks.blogspot.com/2015/01/beware-of-spammers2.html