Quote from: Hhampuz on July 13, 2017, 04:00:27 AM

Quote from: iram1011 on July 12, 2017, 04:23:14 PM

Quote from: odolvlobo on July 11, 2017, 07:06:36 PM

Quote from: AGD on July 11, 2017, 06:20:40 PM

So many wrong answers and such an easy way to get better info. https://en.wikipedia.org/wiki/Pump_and_dump

Quote

"Pump and dump" (P&D) is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" sell their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump and dump schemes are sometimes called "chop stocks".[1]

While fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors.[1]

Yes.

The "pump" is not the increase in price. The pump is the promoting that causes victims to buy, which causes the price to rise. The scammer buys before the pump so that they can get the maximum profit when they sell.

The "dump" is not the fall in price. The scammer dumps the shares at inflated prices to the victims that buy as a result of the pump. The fall in prices happens after the dump when there are no more buyers to support the inflated price.

A "pump group" is a scam. Here is how it works:

1. The scammer creates a "pump group" convincing each member that they are on the inside and that they will profit.
2. The scammer selects a coin and buys it doing their best to pay the lowest price possible.
3. The pump. The scammer announces the time and date when members are supposed to buy.
4. Smarter members buy early, the rest buy at or after the announced time and date.
5. The price starts rising and members and others start buying.
6. The dump. The scammer starts selling as the price rises.
7. The buyers dry up and the price falls.
8. The scammer and some members make money, but everyone else loses.

The pump group scam works because of the belief that the pump is the rise in prices and the dump is the fall in prices.

Finally, this is not all theoretical. I know a guy that does this now, and some old-timers might remember Fontas, who was (and probably still is) a master of pump-and-dump.

You indeed have very well explained pumps and dumps. But what I want to add is Pump and dumps are not termed as scam in a Decentralised market as cryptocurrency market where there is no rules and regulations. It might be unethical on a human level but not scam. Nobody can really questions those admins of pump and dumps group sadly. Traders themselves need to be bit cautious while trading.

Of course most of these pump and dump groups can be considered scams since they'll use the foolishness of the many that participate to earn money for themselves. Most of then always buy before announcing and sell before announcing it. The way they do it can definitely be labeled as a scam.

It is manipulation, and with some market's you can manipulate with 1000 dollars and for some you need a fortune. Pumps and dumps are economy terms and they exist for a long time, much before crypto currencies. Alts, stocks, or anything else that have low value is submissive to manipulation.
With buying and selling some coin they are creating a fake demand, but pay attention they have a lot of coins stashed. When they pump the price enough they start the dump, selling all the coins from their stash, dumping them to others that are late and they get out from the game, and coin without this pump group, that made this fake trading volume, will go down to zero.