Pump And Dump Sa PSE
I am not gonna bore you of definitions ng pump and dump galing sa internet. You deserve more than that.
Pump and dump is when someone or a group of people/brokers try pataasin ang stock price and then sell it sa taas. They will push the price up (pump) at kapag mataas na ang price ay bubuhos sila (dump) leaving other traders especially retail traders na ipit sa taas. This is a form of stock price manipulation.
Since we are trading sa PSE lets take an example sa PSE. Real life example hindi yung gawa gawa lang.
Walang volume ang BLFI for a long time meaning wala halos bumibili until Jan 16, 2020 where out of nowhere it suddenly had 4.05M volume. If titingnan mo ng maigi you could see na one or few guys na gamit ang First Metro Sec na broker ang bumili at nagpataas ng price neto.
Tinulak nila ang price and some other traders joined in. Mula 2.3 pesos tinulak nila ito hanggang 3.48 pesos at nagclose sa 3.15 pesos. 29.63% ang tinaas. Some cluless trader out there is screaming “BREAKOUT!!!!”.
4.05M ang volume with few brokers involved. The next day Jan 17, 2020 560k na lang ang volume ni BLFI.
This means na the pump was not successful. Those people who pushed it is left with the stock on their hand and wala silang way to exit na hindi mgcreate ng loss sa side nila. Parang yung game na hot potato. Hot potato is a party game that involves players gathering in a circle and tossing a small object such as a beanbag or even a real potato to each other while music plays. The player who is holding the object when the music stops is eliminated.
Me and my sister were laughing as this was happening. When I first see BLFI go up I immediately went and look at OBV (On Balance Volume). Si OBV kasi will tell you if totoo ang pag akyat ng isang stock or pump lang. Normal na stock gradual ang pag akyat or pagbaba at hindi nagsaspike. Yung pump kasi biglang spike yan sa OBV. Kung ang OBV ay flat for a long time at biglang spike or kung biglang taas ang price pero si OBV ay flat more or less someone is pumping that stock.
Normal na OBV gradual lang ang galaw.
Kay BLFI ganito.
If titingnan mo history ni BLFI maraming beses na rin may nagtry e pump siya.
Mababa kasi free float/public float ni BLFI. Free float, also known as public float, refers to the shares of a company that can be publicly traded and are not restricted. In other words, the term is used to describe the number of shares that is available to the public for trading in the secondary market. Public float or free float represents the portion of shares of a corporation that are in the hands of public investors as opposed to locked-in stock held by promoters, company officers, controlling-interest investors, or governments
Pumping a stock is not always intentional. Merong mga retail traders minsan na may malalaking pera na bumibili ng stock na hindi nila sadya na mapush ang stock price pataas. Marahil malaki ang spread ng stock na ito o konti lang nasa sell side kaya para makakuha ng maraming shares ay na bubuy up.
I have a rule na I can’t be more than 30% of the stock’s traded value on any day. If the stock has 1M peso traded value I can’t and won’t buy more than 300K. Maraming beses na ako noon naiwan holding a stock na illiquid or walang galaw. Sa laki ng shares na hawak ko di ako makalabas labas.
This is so funny kasi there are people out there now holding BLFI na di mapakali over the weekend. Di rin nila maexit hawak nila unless they will take a massive loss. If you look at the bid and ask ng BLFI by last minute may naglagay 500k shares sa bid just to show na maraming buy orders ang nakapila to take on BLFI. Kaso tatlo lang yung nag order so kita pa rin na walang real demand haha.
As for me I’m on my sixth trade na this year.
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Wow! Learned a lot. Thank youu. Tanong lng po. Do you often check company’s stock data before buying?