Short And Distort

DEFINITION of 'Short And Distort'

An illegal practice employed by unethical internet investors who short-sell a stock and then spread unsubstantiated rumors and other kinds of unverified bad news in an attempt to drive down the equity's price and realized a profit.

BREAKING DOWN 'Short And Distort'

Due to recent corporate scandals and investor uncertainty, fraudsters have an easier time spreading doom and gloom by claiming that a firm is losing a very costly class action suit or is suffering from low earnings. In order to prevent being conned, investors should do their own due diligence and be critical of the authenticity of news from unverified sources.

RELATED TERMS
  1. Poop And Scoop

    A highly illegal practice occurring mainly on the internet. A ...
  2. News Trader

    A trader or investor who makes trading or investing decisions ...
  3. Civil Money Penalty - CMP

    A punitive fine imposed by a civil court on an entity that has ...
  4. Spread

    1. The difference between the bid and the ask price of a security ...
  5. Front Running

    The unethical practice of a broker trading an equity based on ...
  6. Reduced Spread

    A reduction in the spread between the buy/bid and sell/ask price ...
Related Articles
  1. Trading

    Why Is Spread Betting Illegal In The US?

    Spread betting is a speculative practice that began in the 1940s as a way for gamblers to win money on changes in the line of sporting events. But by 1970, the phenomenon trickled into the financial ...
  2. Trading

    Why Financial Spread Betting Gets a Bad Rap

    Spread betting lets speculators trade on price movements. Investors predict whether the spread between the bid price and the ask price will rise or fall.
  3. Investing

    How To Calculate The Bid-Ask Spread

    It's very important for every investor to learn how to calculate the bid-ask spread and factor this figure when making investment decisions.
  4. Trading

    Trading Calendar Spreads In Grain Markets

    Futures investors flock to spreads because they hold true to fundamental market factors.
  5. Markets

    When and How Can Spread Betting Be Profitable

    Providing tax-free income in some countries, spread betting can be highly profitable. Investopedia provides important points for success.
  6. Trading

    How To Short Amazon Stock

    With the stock reaching all-time highs and the company gambling on several new business lines, many investors may feel it's a good time to short sell Amazon.
  7. Trading

    S&P 500 Options On Futures: Profiting From Time-Value Decay

    Writing bull put credit spreads are not only limited in risk, but can profit from a wider range of market directions.
  8. Trading

    What Is Spread Betting?

    The temptation and perils of being over leveraged is a major pitfall of spread betting. However, the low capital outlay necessary, risk management tools available and tax benefits make spread ...
  9. Trading

    Option Spreads: Vertical Spreads

    By John Summa, CTA, PhD, Founder of OptionsNerd.comLimiting Risk with Long and Short Options Legs We have seen that a spread is simply the combination of two legs, one short and one long (but ...
  10. Investing

    What is Spread?

    Spread has several slightly different meanings depending on the context. Generally, spread refers to the difference between two comparable measures.
RELATED FAQS
  1. What are some examples of financial spread betting?

    Learn how financial spread betting is done, and see examples of some of the ways that investors can use spread betting as ... Read Answer >>
  2. What types of stocks have a large difference between bid and ask prices?

    Find out which factors influence bid-ask spread width. Learn why some stocks have large spreads between bid and ask prices, ... Read Answer >>
  3. What is the average debt/equity ratio for the Internet sector?

    Learn about how debit option spreads work, including their maximum profit and loss, and understand how time decay impacts ... Read Answer >>
  4. How do I use the bid-ask spread to evaluate whether I should buy a particular stock?

    Understand the significance of the bid-ask spread for investors in making a decision on whether or not to purchase a particular ... Read Answer >>
  5. What are the primary risks an investor should consider when investing in the Internet ...

    Learn what risks to look out for when considering investments in the Internet sector in order to maximize potential profits ... Read Answer >>
  6. Why do stock prices change following news reports?

    Stock prices move up and down every minute due to fluctuations in supply and demand. If more people want to buy a particular ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center