[funsec] How Lucrative is Pump-and-Dump Spam?
sean at donelan.com
Fri Mar 9 18:07:15 CST 2007
On Fri, 9 Mar 2007, Fergie wrote:
> Over the last month, Moriarty, director of product development for Internet
> Content Security at Trend Micro, has been running a virtual portfolio of
> selling short on stocks found during spam runs. After 22 transactions in a
> five-week period, he has earned a whopping $25,610.
Virtual, i.e. he really didn't do it.
> Short selling (shorting) a stock is the act of profiting from a stock price
> going down. A short seller will typically borrow a security and sell it,
> expecting that it will decrease in value so that they can buy it back at a
> lower price and keep the difference.
Brokages will not let you short penny stocks.
> "I made money on every transaction," he added.
You can't spend virtual money you didn't actual make.
If you actually tried shorting penny spam stocks, you would probably still
lose your money to the con. Because you would have to "borrow" (i.e.
someone has to buy it) the stock from the con-men in the first place, and
then pay the con-men again for stock to cover the short. And the brokers,
transfer agents, etc all make commissions each time.
More information about the funsec