daisy chain

Daisy Chain

A group of unscrupulous investors who, practicing a kind of fictitious trading or wash selling, artificially inflate the price of a security so that they sell it at a profit.

Notes:

Investors who do not look carefully at a stock are the usual prey of a daisy chain. As a stock rises due to increased volume, investors who didn't do all their homework may be attracted to the stock because they want 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.

Manipulating price is typically very difficult in stocks with heavy volumes, so those stocks with low liquidity are much more susceptible.

See also: Liquidity, Liquidity Risk, Pump and Dump, Short Squeeze, Volume, Wash Sale

---

Daisy chain

Manipulation of the market by traders to create the illusion of active volume to attract investors.

---

daisy chain

Manipulative trading among a small group of individuals or institutions that is intended to give the impression of heavy volume. As outsiders see the unusual trading activity and are drawn into the chain, the traders who started the daisy chain then sell their positions, leaving the new investors with overpriced securities.