| There are many tricks that can be played by | | | | What can you do as a safeguard measure? Find out |
| institutions to the detriment of the average penny | | | | when the stock held by institutional investors |
| stock investor. One such "trick" is when institutions | | | | becomes free trading. In a lot of cases, even if the |
| are shorting the very stock they have invested in. As | | | | institution states they have no intention of selling |
| soon as the shares they have bought become | | | | shares when they become free trading, they end up |
| unrestricted, they dump them on the market. They | | | | doing so. And this can sometimes be understandable |
| establish a small profit from the shares they have | | | | since they may have been holding the stock for a |
| dumped on the market, but the real profit they | | | | long time. But watch to see if they sell in small |
| make is made from covering their short positions | | | | increments as to avoid an abrupt decline in price... and |
| after the price of the penny stock falls. The price | | | | above all watch that they aren't part of any short |
| could collapse as a result of all the selling done by the | | | | selling activity. The majority of institutional investors |
| institutions, which in turn also triggers panicked | | | | conduct their activity in an ethical manner and rely on |
| individual investors who sell after seeing the huge sells | | | | legitimate trading techniques. No reputable firm would |
| from institutions. | | | | involve itself in any transaction that appears to be |
| The next "trick" played is that as the price settles at | | | | fraudulent. The last thing an institution needs is an |
| a much lower level because of all the selling, the | | | | investigation. |
| institution buys back the stock at a much lower price. | | | | Keep an eye on institutional trading activities as a |
| They use that stock that they just bought again at a | | | | technique in helping you find the best penny stocks. |
| much lower price... and return it to the brokers they | | | | It's also a solid indicator on when to buy or sell. |
| borrowed the stock from when they shorted it. | | | | |