Investing term

What is Pump and dump?

Coordinated promotion of a thinly-traded stock or crypto to drive the price up, followed by the promoters selling while retail buyers are still piling in.

A pump-and-dump is a manipulation scheme where promoters hype a thinly traded stock or crypto to drive the price up, then sell their holdings into the buying frenzy, leaving latecomers with collapsing prices. Social media has made them rampant. The tell is aggressive, coordinated promotion of an obscure asset promising fast, guaranteed riches.

For example

Influencers suddenly flood feeds promoting a tiny coin; it spikes, the promoters cash out, and the price craters onto everyone who bought the hype.

Pump and dump is taught hands-on in Stage 9 — Fees, Scams & Protecting Your Money.

See the lesson →

Related terms

ChargebackA consumer protection on credit-card transactions that lets you reverse fraudulent charges.Fee dragThe cumulative effect of every fee you pay on the return you actually keep.FX markupThe gap between the true (mid-market) exchange rate and the rate your broker gives you.Inactivity feeA fee charged if you don't trade enough times per year.
← Back to the full glossary