Daisy Chain
Definition of 'Daisy Chain'A group of unscrupulous investors who, practicing a kind of fictitious trading or wash selling, artificially inflate the price of a security so that they sell it at a profit. Price manipulation is typically very difficult in stocks with heavy volumes, so the stocks with low liquidity are much more susceptible to daisy chains. |
|
Investopedia explains 'Daisy Chain'Investors who do not look carefully at a stock are the usual prey of a daisy chain. As a stock rises due to increased volume, investors who didn't do all their homework may be attracted to the stock because they want to participate in the rising price. These investors are typically caught owning a stock that continues to depreciate long after the daisy chain sells out their positions for a profit. |
Related Definitions
Articles Of Interest
-
What is a "wash sale"?
The Wash-Sale rule was established to disallow a loss deduction of a security sold, if within 30 days of the date of the sale an investor buys substantially identical stock or securities, or ... -
What is a "daisy chain"?
A daisy chain is a term used to describe a group of investors who engage in activities that inflate or deflate the price of a stock for the purpose of selling it for profit or buying it cheaply. ... -
Online Investment Scams Tutorial
To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic. -
War's Influence On Wall Street
Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common. -
The Pioneers Of Financial Fraud
These fraudsters were the first to commit fraud, participate in insider trading and manipulate stocks. -
What is a stock ticker?
A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the various stock exchanges. A "tick" is any change in price, whether that ... -
Institutional Investors
Learn more about the advantages that financial institutions enjoy when buying and selling securities. -
Weighted Average
Learn how to weigh the relative importances of data points in a calculated average. -
Bid-Ask Spread
Find out more about this frequently referenced, but often misunderstood, term used to describe the price at which a stock is bought or sold at. -
Why Is Liquidity Important?
Learn more on why liquidity is important to consider when examining a stock, next to its share price.
Free Annual Reports