What is Bear Raid?
2 those involved in the bear raid can achieve a huge profit, but other investors can lose a considerable amount of money. Ethical concerns about the efforts to fork the price of securities have led many countries to declare the use of raids on bears for illegal.
How does it work
Bear could try a large trader or cartel of traders who use their combined sources in the settlement. After the introduction of resources, the security is identified as a viable project. The cartel deals with the plan of aggressive short sales for safety, which in turn begins the process of reducing the value of each share of safety. At the same time, it is not uncommon for a cartel to use an oral word to create a certain degree of suspicion of security stability. As a negative reputation of Secreta, the Cartel is able to start buying security shares at lower prices and continue the short -term sales strategy up to the DNA security.
After the safety has reached a sufficiently low value, the cartel begins to buy shares that will stick, as the safety is slowly recovering from the bear air raid and the negative rumors begin to retreat. This is known as the creation of an artificial long position, which ultimately can produce a great profit. Shopping, when the price is low and sells when the price has increased significantly, all expenses associated with bear raid and traders can get excellent profits from the company. Although this process may take months or even years to achieve, the attraction of large profits causes the prospect to attract for people who can wait for so long a strategy full of work.
expensive for other investors
The disadvantage of the bear's raid is that while a group of traders earns a lot of money, others will lose money due to manipulation that caused a decrease in the value of security. This mixture starting with a short position, ktErá ranges from short sales for heavy selling for long positions, does not include the natural process of market performance. The very nature of the bear's air raid is why many countries have adopted strict legal regulations that make this tactic illegal and punished by fines and imprisonment.