Daisy chain

A kind of fictitious trading, or wash selling, whereby a group of unscrupulous investors artificially inflate the price of a security so that they sell it at a profit. As a stock price rises due to increased volume, investors who didn’t do all their homework may be attracted to the stock in order to participate in the rising price. These investors are typically caught owning a stock that continues to depreciate long after the daisy chain sells out their positions for a profit.

Advertisement

Comments