9 Oct 2014

Word on the Street - Ghosting

Even in the world of Finance, Ghosting (which has an obvious resemblance to the verb form of ghost) has a negative connotation. This is an illegal practise which is prohibited in most countries and can result in serious charges against defaulters.

Ghosting, essentially would mean an illegal attempt by two or more market markers to bring about changes in the price of a particular stock. This involves two parties where one party tries to inflate or deflate the price of a stock while the second party does a similar action which tries to either enhance the results of the first party or make it look ambiguous. Here, the parties can be an individual or a company.

This activity becomes unethical and illegal because it violates the basic norm of trading/investing – equal and fair competition among all investors. Here, the investors falsely tend to believe the upward/downward slide in prices and sell them at below the actual worth which takes a hit on their gain. And the market makers have a share of the profit from the price fixing.

For more information, visit these links: http://www.opednews.com/articles/Are-Financial-Markets-Bein-by-Danny-Schechter-090709-731.html , http://www.ft.com/cms/s/0/c4baf670-1bfe-11df-a5e1-00144feab49a.html#axzz3FQc0fljv

This Word is suggested by Sonika Krishnan (PGDM 2013-15)

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