So many people ask
- Who are the operators in Stock Market?
- Where do they come from?
- How do operators trap retail traders?
- What is the working style of operators?
- What are the operator’s favorite stocks?
- How to protect yourself from stock market operators?
All we are going to cover in this article is in detail. We are also going to cover one story of a monkey. That will help you to understand who are the operators in Stock Market completely. After reading this article all your questions regarding “Operator” will be completely resolved.
If you want to become successful in stock market investing and trading. Then it is very important to understand all important terms of the Stock market and Forex market. Operators are one of the important factors affecting the price of stocks, bonds, and other financial assets.
It is very important to know how prices fluctuate by the big players of the Stock market. If you are new to the stock market or want to know the basics of the Stock market then you can go through this beginner guide for stock market investing.
Who are the operators in Stock Market
Market participants who are from the syndicate to manipulate stock prices for personal gain are Operators in Stock market. They are usually a cartel of brokers, speculators, and sometimes even company insiders.
Let’s see this in brief, a group of individuals or organizations combined to promote a common interest who manipulate the prices of stocks for their personal gain and profit. They drive the price of stock up and down by their financial power.
They are usually groups of brokers, or speculators (individuals or organizations that place bets on asset prices for short-term intervals to make a profit)
Story of Monkey
We will understand this by the story of a monkey. You might have heard this story, but I urge you to read this story because further in this article I am going to use it. This story will help you to understand who are the operators in Stock Market.
There was a small village, and near that village there was a jungle. In that jungle, there were so many monkeys.
There was a one-monkey buyer. Who initially set the price of the monkey for 100 rupees.
He was expecting villagers to sell him a monkey. But that price was very low according to villagers. They were thinking who will do that much hassle for 100 rupees only?
So the monkey buyer increases the price of the monkey to 200 rupees. Still, villagers were not interested in capturing the monkey and selling him to the monkey buyer.
Now buyer sets the price of the monkey to 500 rupees. Now villagers are attracted by that deal and become ready to sell monkeys to monkey-buyers. That was a very easy task to make money for villagers.
Now villagers start to sell monkeys to that buyer. They sell monkeys for 500 rupees and go to their home.
Every day they do the same process. But one day finding the monkey in the jungle becomes a very difficult job. Getting monkeys becomes a very rare scenario. They sell all the monkeys to that buyer. In exchange for 50000 rupees villagers sell all monkeys to that monkey-buyer.
Now the real story begins. Monkey buyers create confidence in villagers that if they find a monkey and sell it, villagers will get 500 rupees. That creates overconfidence, and villagers think money-making is very easy. Sell the monkey and get the money.
After two months same monkey buyer came and now he sets the price of the monkey to 2000 rupees. Now hearing this offer villagers become mad. They go to the jungle and start to find monkeys everywhere.
But there was no monkey left in the jungle. Now the monkey-buyer increased the price of the monkey to 2500 rupees. Now people become really mad. But there were no monkeys left in the jungle.
Now the buyer has announced a special offer for 2 days to sell the monkey and get 5000 rupees. Now people have started to find monkeys everywhere. But there was no monkey left. Villagers were ready to do anything to get monkeys. Here the demand increased and the supply decreased.
Now new player has entered the market. One monkey seller comes into their village with so many monkeys. Villagers know that there is one person who came to their village to sell monkeys. The monkey seller was selling monkeys for 3000 rupees.
Now villagers think that the seller is selling monkeys for 3000 rupees and the monkey buyer is buying them for 5000 rupees. There is a net 2000 rupees profit per monkey.
So villagers buy all the monkeys from that seller for 6 lakhs rupees.
But when villagers go to monkey buyers to sell their all monkeys there is no one in the market to take their monkeys in market. So they cried loudly. There was an offer for 2 days but that monkey buyer vanished from the market within the first day.
So villagers go to that monkey seller to sell them all monkeys but, that monkey buyer also vanished from the market.
Now the value of the monkey becomes zero. There was no buyer for monkeys. Villagers now only have monkeys with no value.
Now we are going to relate this fraud to a real market scenario. Here Villagers were retail investors and traders. Monkey was Stock or share or any other asset and Monkey buyer and Monkey seller were operators. Here monkey buyers and sellers were part of a cartel of operators.
Here operator generates a profit of 550000(600000-50000) rupees.
People who have more capital and wealth. Those people who have the power to change and manipulate the price of any asset significantly, are called operators in Stock Market. Hope you understand who are the operators in Stock Market.
What is the biggest tool of Operators in Stock market?
Fear is the biggest tool of the operator. they fall down good stocks to create panic increase the price of Bad stocks and create an environment of fear.
They try to remove good stocks from your portfolio and try to add bad stocks to your portfolio.
Operators create traps for small investors and traders. People have less knowledge of the stock market. Below is the list of targeted people of Operators.
- New Investors
- No patience
- FOMO – Fear of missing out
- Upper circuit
- Lower Circuit
- Penny Stocks
- Papular Stocks
- News Based
- Down Trend
- Sudden Relly and Lack of knowledge
Who are the operators in Stock Market and how do they work?
How do operators in Stock Market work?
Here are some examples of how operators bring the price high and then dump the stock price.
Mauria Udyog Ltd
7NR Retail Ltd
Agro Phos (India) Ltd
After explaining who are the operators in Stock Market, we will cover how operators in Stock Market work.
Individuals or groups of individuals that seek to influence the price of a stock by creating artificial supply and demand are known as stock market operators. They accomplish this by placing huge buy or sell orders, disseminating misinformation, or employing other techniques to influence investor behavior.
Here are some of the ways that stock market operators work:
- Pump and dump schemes
- Circular trading
- Wash trading
- Spreading misinformation
How can investors protect themselves from being manipulated by stock market operators?
Investors can take numerous precautions to protect themselves from stock market manipulation:
Do your analysis: Before investing in any stock, do some research and learn about the company’s fundamentals, financial performance, and industry. This will allow you to make decisions that are more informed about whether to invest in the stock and avoid being convinced by hype or inaccurate information.
Be aware of sudden price movements: If the price of a stock suddenly rises or falls, it is vital to be cautious and analyze the cause of the move. This could be an indication of market manipulation, so make sure you have all the data before making any financial decisions.
Avoid investing in thinly traded stocks: Because there is less liquidity in the market, thinly traded equities are more susceptible to manipulation. This makes it easy for a manipulator to artificially inflate or deflate the stock price.
Diversify your portfolio and avoid putting all of your eggs in one basket. Diversifying your portfolio by investing in a diverse range of companies from several industries will help to lessen your chance of loss if any one stock is manipulated.
Unsolicited investment advice should be avoided: Be suspicious of unsolicited investment advice from online chat rooms, social media, or email. This advice could be deceptive or even fraudulent. Before making any investing decisions, always conduct your own research.
Report suspected manipulation to the authorities: If you feel that a stock is being manipulated, you can notify the Securities and Exchange Commission (SEC) or another appropriate regulatory authority.
Working with a financial advisor: If you are unsure about making investing decisions on your own, you should think about hiring a financial counselor. A financial advisor can assist you in developing an investing strategy and making sound selections based on your risk tolerance and financial objectives.
By taking these precautions, investors can help protect themselves against stock market manipulation and make more informed investing decisions. Hope this is related to who are the operators in Stock Market.
Can we follow operators in stock market?
Following operators can be very risky. It is important before investing and trading we should do proper research.
In short, operators are groups of individuals or organizations combined to promote a common interest who manipulate the prices of stocks for their personal gain and profit. They drive the price of stock up and down by their financial power. Hope you understand who are the operators in Stock Market.