Bear raid: Difference between revisions
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==History== |
==History== |
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{{See also|Financial history of the Dutch Republic|Dutch East India Company}} |
{{See also|Financial history of the Dutch Republic|Dutch East India Company}} |
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The practice of bear raid has its roots in the 17th-century [[Dutch Republic]]. In 1609, [[Isaac Le Maire]], a sizeable shareholder of the [[Dutch East India Company]] (VOC), organized a bear raid on the stock of the company.<ref>{{cite journal|author=Sayle, Murray|author-link=Murray Sayle|date=2001-04-05|title=Japan goes Dutch|url=http://www.lrb.co.uk/v23/n07/murray-sayle/japan-goes-dutch|journal=[[London Review of Books]]|volume=23|issue=7|pages=3–7|issn=0260-9592|accessdate=2017-11-01|quote=...Dutch market punters pioneered [[short selling]], [[option trading]], debt-equity swaps, [[merchant banking]], unit trusts and other speculative instruments, much as we now know them. With them came specialised offshoots – insurance, retirement funds and other orderly forms of investment – and the maladies of capitalism: the [[boom-bust cycle]], the world's first asset-inflation bubble, the [[tulip mania]] of 1636-37, and even, in 1607, history's first bear raider, a canny shareholder named [[Isaac le Maire]] who dumped his VOC stock, forcing the price down, and then bought it back at a discount.}}</ref> |
The practice of bear raid has its roots in the 17th-century [[Dutch Republic]]. In 1609, [[Isaac Le Maire]], a sizeable shareholder of the [[Dutch East India Company]] (VOC), organized a bear raid on the stock of the company.<ref>{{cite journal|author=Sayle, Murray|author-link=Murray Sayle|date=2001-04-05|title=Japan goes Dutch|url=http://www.lrb.co.uk/v23/n07/murray-sayle/japan-goes-dutch|journal=[[London Review of Books]]|volume=23|issue=7|pages=3–7|issn=0260-9592|accessdate=2017-11-01|quote=...Dutch market punters pioneered [[short selling]], [[option trading]], debt-equity swaps, [[merchant banking]], unit trusts and other speculative instruments, much as we now know them. With them came specialised offshoots – insurance, retirement funds and other orderly forms of investment – and the maladies of capitalism: the [[boom-bust cycle]], the world's first asset-inflation bubble, the [[tulip mania]] of 1636-37, and even, in 1607, history's first bear raider, a canny shareholder named [[Isaac le Maire]] who dumped his VOC stock, forcing the price down, and then bought it back at a discount.}}</ref> |
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Revision as of 16:39, 21 May 2023
A bear raid is a type of stock market strategy, where a trader (or group of traders) attempts to force down the price of a stock to cover a short position. The name is derived from the common use of bear or bearish in the language of market sentiment to reflect the idea that investors expect downward price movement.[1]
A bear raid can be done by spreading negative rumors about the target firm,[2] which puts downward pressure on the share price. This is typically considered a form of securities fraud. Alternatively, traders could take on large short positions themselves, manipulating the price with the large volume of selling,[3] making the strategy self-perpetuating.
History
The practice of bear raid has its roots in the 17th-century Dutch Republic. In 1609, Isaac Le Maire, a sizeable shareholder of the Dutch East India Company (VOC), organized a bear raid on the stock of the company.[4]
See also
References
- ^ Law, Jonathan, ed. (2008). A dictionary of finance and banking (4th ed.). Oxford: Oxford University Press. ISBN 9780199229741. Retrieved 22 November 2014.
- ^ Malik, Andrew; Sarna, David E.Y. (2010). History of Greed Financial Fraud from Tulip Mania to Bernie Madoff. Hoboken: John Wiley & Sons. p. 62. ISBN 9780470877708. Retrieved 22 November 2014.
- ^ Scott, David L. (2003). Wall Street words : an A to Z guide to investment terms for today's investor (3rd ed., newly revised and updated. ed.). Boston: Houghton Mifflin. p. 28. ISBN 0618176519. Retrieved 22 November 2014.
- ^ Sayle, Murray (2001-04-05). "Japan goes Dutch". London Review of Books. 23 (7): 3–7. ISSN 0260-9592. Retrieved 2017-11-01.
...Dutch market punters pioneered short selling, option trading, debt-equity swaps, merchant banking, unit trusts and other speculative instruments, much as we now know them. With them came specialised offshoots – insurance, retirement funds and other orderly forms of investment – and the maladies of capitalism: the boom-bust cycle, the world's first asset-inflation bubble, the tulip mania of 1636-37, and even, in 1607, history's first bear raider, a canny shareholder named Isaac le Maire who dumped his VOC stock, forcing the price down, and then bought it back at a discount.
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