Let's say the sp is $2.
If an insto knows there are 1m shares in stop losses at $1.95, "they" can short sell (by lending shares from their left hand to their right perhaps, or in tandem with their mates), which will lower the price to $1.95 (they just sell into the bids down to $1.95, easy). At this point, 1m shares will become available. They expected this and can buy those new 1m shares, plus cover their shorts also from other new volume at/near $1.95.
"Their" net gain/loss on the owned and lent shares is effectively zero (what "they" lost on their long holding, they made on their short position); but they have been able to accumulate more shares at a cheaper price than $2, because they fabricated/forced the price down to $1.95 and triggered more volume for sale via stop losses.
There is only a problem if no new volume is triggered into the sell queue as the price is dropped... But this is rarely ever a problem because they know people have stop losses in place and they know they can assist people to become nervous as the price is falling and convince them to sell... BS analyst reports for example!
At the end of the day, they have more shares at a lower manipulated price and can then reverse all the commentary and ride the wave back up, to eventually profit from their new larger long positions. Rinse and repeat.
If no-one sells into their BS, they are only playing with themselves (or eachother), and the scheme doesn't really work so well.
However, if no-one else plays into their games, they can cover internally (sell back their own shares they bought during their shorting) at a lower price, and then the end result is a lower sp, which had nothing to do with anyone wanting in or out of the stock, it was purey manipulated by shorting and covering internally with zero net gain/loss.
The only result in this case is a lower sp. Good for T/O pressure or encouraging others to now sell, so they can accumulate more for less.
An easy way to envisage this is to imagine the buy/sell queues are empty. No bids, no asks.
Now, I sell (short) to "myself"/mate at a lower price to the last market price. Bingo, price dropped. Company "worth" less. I then cover at the same price. Price still low. "My" net gain/loss = zero. End effect is a lower sp. Purely manipulated, at no cost.
The reality is the other players are intertwined into the buying and selling along the way, but the overall concept remains sound. Manipulated money making due to the differences between triggering sales/stops on the way down vs up.
Just my thoughts....
But I reckon if I had 50 million bucks I could play these scheming games too... But the insto's and banks are untouchable, no..?
I would be locked up
