Daisy Chain

What does it mean?
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.

In Other Words...
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.

Related Links
Investment Scams Tutorial - To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic.

Related Terms
Liquidity | Liquidity Risk | Pump and Dump | Short Squeeze | Volume | Wash Sale

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