Pump-and-dump

Pump-and-dump is a scheme where a group hypes a cheap share or coin, then sells at the peak, leaving followers with falling prices.

Pump-and-dump: A pump-and-dump is a scheme in which people push up the price of a cheap share or crypto coin using hype, tips and fake news, then sell their holdings at the high. The price then crashes, and the late buyers who followed the tip lose money.

Telegram channels, WhatsApp groups and YouTube videos announce a "sure shot" stock that will double soon. Members are told to buy before a certain time. As more people buy, the price rises, and the organisers sell. When the buying stops, the price falls fast and the group goes silent or blocks critics. The tips are usually pushed with countdowns, rocket emojis and fake screenshots of earlier wins.

Real research does not arrive as a countdown in a chat group. Be wary of unknown advisers sending tips for a fee, screenshots of profits and urgency. Use brokers and advisers registered with the market regulator, checked on its official website. If a tip sounds secret and urgent, assume that you are the exit liquidity. Small investors who buy late usually carry the loss while the organisers walk away with gains.

Tips

• Ignore stock or coin tips from anonymous groups and channels.
• Check that any adviser is registered on the regulator's official website.
• Never buy something just because the price is rising fast.

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