Ghosting

AAA

DEFINITION of 'Ghosting'

An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. Ghosting is used by corrupt companies to affect stock prices so they can profit from the price movement.

INVESTOPEDIA EXPLAINS 'Ghosting'

This practice is illegal because market makers are required by law to act in competition with each other. It is known as "ghosting" because, like a spectral image or a ghost, this collusion among market makers is difficult to detect. In developed markets, the consequences of ghosting can be severe.

RELATED TERMS
  1. Market-Maker Spread

    The difference between the price at which a market maker is willing ...
  2. Freeriding

    1. An illegal practice in which an underwriting syndicate member ...
  3. Manipulation

    The act of artificially inflating or deflating the price of a ...
  4. Two-Sided Market

    A market in which market makers (or specialists) are required ...
  5. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  6. Accommodation Trading

    A type of trading in which a trader accommodates another by entering ...
Related Articles
  1. Economics

    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.
  2. Options & Futures

    Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  3. Investing

    Do traders, market makers, specialists or others ever deliberately drive a stock's price down to "shake ...

    Many individual investors have had the experience of closing their position in a stock only to see the price rebound moments later. When this happens, it may lead the investor to believe that ...
  4. Professionals

    Understanding Interpersonal Skills

    Interpersonal skills are the social skills people use to interact effectively with other people. A lack of good interpersonal skills may lead to unsuccessful personal relationships, as well as ...
  5. Investing

    Sarbanes-Oxley Act Of 2002 – SOX

    The Sarbanes-Oxley Act of 2002 is a legislative response to a number of corporate scandals that sent shockwaves through the world financial markets.
  6. Investing Basics

    What are key points to a good corporate social responsibility policy?

    Learn the main components of a good corporate social responsibility policy, including communication with stakeholders, partnerships and measurement tools.
  7. Investing Basics

    What are some high profile cases of companies who failed to be socially responsible?

    Learn about corporate social responsibility. Explore how Enron's lack of corporate responsibility ultimately destroyed the company and ruined many lives.
  8. Personal Finance

    What are the top trends in corporate social responsibility?

    Learn about top trends in corporate social responsibility. Companies are increasing transparency, innovating, investing locally and addressing inequalities.
  9. Entrepreneurship

    How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading the word about the firm.
  10. Brokers

    How does lack of corporate social responsibility hurt a company's bottom line?

    Learn about the perils of a lack of corporate social responsibility. Examine the WorldCom fraud, which led to its bankruptcy and imprisonment for its officers.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center