Bear raid: Difference between revisions
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A bear raid can be done by spreading negative [[rumor]]s about the target firm,<ref>{{cite book|last1=Malik|first1=Andrew|last2=Sarna|first2=David E.Y.|title=History of Greed Financial Fraud from Tulip Mania to Bernie Madoff.|date=2010|publisher=John Wiley & Sons|location=Hoboken|isbn=9780470877708|page=62|url=https://books.google.com/books?id=KxMnRJ0-__UC&pg=PT62|accessdate=22 November 2014}}</ref> 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, [[market manipulation|manipulating]] the price with the large volume of selling,<ref>{{cite book|last1=Scott|first1=David L.|title=Wall Street words : an A to Z guide to investment terms for today's investor|date=2003|publisher=Houghton Mifflin|location=Boston|isbn=0618176519|page=28|edition=3rd ed., newly revised and updated.|url=https://books.google.com/books?id=7hsXI8_zwoEC&pg=PA28|accessdate=22 November 2014}}</ref> making the strategy self-perpetuating. |
A bear raid can be done by spreading negative [[rumor]]s about the target firm,<ref>{{cite book|last1=Malik|first1=Andrew|last2=Sarna|first2=David E.Y.|title=History of Greed Financial Fraud from Tulip Mania to Bernie Madoff.|date=2010|publisher=John Wiley & Sons|location=Hoboken|isbn=9780470877708|page=62|url=https://books.google.com/books?id=KxMnRJ0-__UC&pg=PT62|accessdate=22 November 2014}}</ref> 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, [[market manipulation|manipulating]] the price with the large volume of selling,<ref>{{cite book|last1=Scott|first1=David L.|title=Wall Street words : an A to Z guide to investment terms for today's investor|date=2003|publisher=Houghton Mifflin|location=Boston|isbn=0618176519|page=28|edition=3rd ed., newly revised and updated.|url=https://books.google.com/books?id=7hsXI8_zwoEC&pg=PA28|accessdate=22 November 2014}}</ref> making the strategy self-perpetuating. |
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==History== |
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{{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. |
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== See also == |
== See also == |
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Revision as of 05:56, 30 July 2017
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.
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.
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