Four Steps of Market Manipulation by Hot Money

In fact, there are four steps to hot money manipulating the market:

1. Stock selection: Study policies, choose an industry and companies within it, and pick the right company at the right time to manipulate.

2. Contact: Reach an agreement with top management to cooperate with your moves. This mainly involves two points: preventing major shareholders from selling off their stakes during the operation, and having them release positive news according to the plan, such as market or technological developments.

3. Trading: These hot money operators—or several accounts they control, sometimes dozens—position themselves early. Then they ride the wave of company news, buying and selling on their own, using various tactics to push the stock to limit-up and attract market attention.

4. Promotion: The ultimate goal of all this is to find someone to take over the position. Who would that be? Obviously, retail investors. To get them hooked, the previous maneuvering alone won't work. Media involvement is essential—namely, research analysts. They are the ones who publish research reports expressing optimism about a stock that has already risen to its target level.