manipulation

ma·nip·u·la·tion   (mə-nĭp'yə-lā'shən)    n.   The act or practice of manipulating. The state of being manipulated. Shrewd or devious management, especially for one's own advantage. [French, from manipule, handful, as of grain, from Latin manipulus, sheaf, handful; see maniple.]

manipulation 

Manipulation

The act of artificially inflating or deflating the price of a security. In most cases, manipulation is illegal. It is much easier to manipulate the share price of smaller companies, such as penny stocks, because they are not as closely watched by analysts as the medium- and large-sized firms.

Also known as "price manipulation".

Investopedia Commentary

One way people can deflate prices is by placing hundreds of small orders at a significantly lower price than what it has been trading. This gives investors the impression that there is something wrong with the company, so they sell, pushing the prices even lower. Another example of manipulation would be to place simultaneous buy and sell orders through different brokers that cancel each other out, but give the perception that because of the higher volume there is increased interest in the security.

Related Links

A Case Study: Earnings Manipulation And The Role Of The Media
How Some Companies Abuse Cash Flow
Policing The Securities Market: An Overview Of The SEC

See also: Corner a Market, Order, Painting the Tape, Penny Stock

Main Entry: ma·nip·u·la·tion
Pronunciation: m&-"nip-y&-'lA-sh&n
Function: noun
1 : the act, process, or aninstance of manipulating especially a body part by manual examination and treatment; especially : adjustment of faulty structural relationships by manual means (as in the reduction offractures or dislocations or the breaking down of adhesions)
2 : the condition of being manipulated manipulation —M. W. Straight>

manipulation ma·nip·u·la·tion (mə-nĭp'yə-lā'shən)
n.

1. The act or the practice of manipulating.

2. The state of being manipulated.