by Recyclersteve » Fri Jul 12, 2024 3:08 am
I'm gonna speculate without taking a lot of time to dig deeply for more info. I've seen cases where two people or a small group of friends get together to try and manipulate (yes, I used that word) price up artificially. Please bear with me as I use a mythical example from the stock market.
Let's say that XYZ stock is trading for $1 a share. Five good friends decide they can manipulate the stock from $1 a share to $10 a share even with no real news whatsoever. They agree to buy shares at elevated prices up to $10 a share, even though they should know this is only a stock really worth around $1.
Now they are definitely playing a dangerous game and one where they could end up paying $10 for a stock that is only worth perhaps $1.50 to $2 a few days later. But the game they are playing is that they realize people will see no news and say "Hey, they're buying that stock for no known reason because I can't see any news. And the volume is going up a lot. This normally trades 50,000 shares a day and the past few days it has traded several million shares EACH day. So something MUST BE going on." And they end up buying. Well, they are likely being played. Often times the company will be one they'd never heard of before and perhaps they don't even understand what the company does, how they could possibly be that special vs. competitors, etc.
I will admit that I have found plenty of these and sold them short. In other words, I see a stock trading for, say, $12 and it was $3 a week ago with no news to justify the quadrupling. If I'm really convinced there is nothing really special behind this, I will sell shares that I don't own in my account at, say, $10 a share (I want to see the stock start to come down before betting that it will go down further). If I shorted 500 shares of XYZ stock, my account would show that I own -500 shares (not 500 shares). Then, let's say I buy back the stock a week later at perhaps $4 a share, I've made a profit of $3,000. I sold (short) at $10 and bought back at $4, so $6 profit per share. That times 500 shares is a profit of $3,000 minus any potential commissions or fees which should be generally nonexistent or very close.
Keep in mind that if this is a legitimate company and it goes to $20, then I'm losing $10 a share or $5,000 total. So you have to dig deep on these opportunities to separate the good from the bad.
Now I gave a stock example, but I think the same basic thing can work with coins on eBay, especially when they are newly discovered and just minor things like most die cracks, etc.
There are definitely exceptions like the Wisconsin extra leaf quarters (leaf up and leaf down varieties). Even though they were manufactured by a rogue employee, those were pretty cool errors I have to admit.
That's all for now.
Former stock broker w/ ~20 yrs. at one company. Spoke with 100k+ people and traded a lot (long, short, options, margin, extended hours, etc.).
NOTE: ANY stocks I discuss, no matter how compelling, carry risk- often
substantial. If not prepared to buy it multiple times in modest amounts without going overboard (assuming nothing really wrong with the company), you need to learn more about the market and managing risk. Also, please research covered calls (options) and selling short as well.