June 01, 2020
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Shady Bulls And Bears

Shady Bulls And Bears
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  • You are the promoter of Shady Finevest, a little known company with small number of shares in the market.

  • Form a group with some brokers and buy and sell shady shares among yourselves, that is, you do a circular trading to raise the price of the scrip. Soon your coterie will have possession of the lion's share of all the floating stock of the Shady scrip.

  • Meanwhile, spread rumours about imminent fantastic results, upcoming bonus issues etc. So others too join in and jack up the price as far as it can go. Be ambitious- some smart operators have managed to raise their share prices tenfold or more in 6-8 weeks.

  • As you had expected, the bear operators now move in, and start short selling, that is, promise deliveries of Shady shares at below current market price.

  • The BSE has noticed Shady rising very fast, so they have put in a circuit-breaker price- say rs180- above which the computerised trading system disallows transactions. Your cartel monopolises the trading and keeps the constant at Rs 180. The bear cannot qoute higher because the transaction will be disallowed and he cannot qoute lower, because the system will reject the bid.

  • The circuit- breaker price keeps going up everyday, and you keep making sure that the bears can't deliver, since they can't lay their hands on any stock: your cartel is in possession of almost all Shady shares.

  • When the bears default, the BSE sets up an auction where bears have to buy the requisite number of shaers from the shady shareholders. Since you have all shares, you can peg the auction as high as you want to.
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