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A Model of Stock Manipulation Ramping Tricks

Author

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  • Ke Liu
  • Kin Lai
  • Jerome Yen
  • Qing Zhu

Abstract

Ramping tricks of trade-based stock manipulation have evolved greatly in the fight with stricter market regulation, and can be extremely complicated nowadays. Despite the rigidity and soundness, theoretical models proposed in extant literature can hardly be applied directly to real market data, due to their assumptions being far away from reality. On the other hand, empirical studies of ramping manipulation still lack guidance and support from theories that can better reflect ramping details in practice. This paper addresses this gap by constructing a theoretical model that is closely linked to practical detection, in the framework of behavioral finance. New insights into concrete ramping manipulation tricks are also contributed to the literature. The potential of the model for manipulation detection is demonstrated by applying it to the two most infamous manipulation cases in the history of Chinese stock market. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Ke Liu & Kin Lai & Jerome Yen & Qing Zhu, 2015. "A Model of Stock Manipulation Ramping Tricks," Computational Economics, Springer;Society for Computational Economics, vol. 45(1), pages 135-150, January.
    • Handle: RePEc:kap:compec:v:45:y:2015:i:1:p:135-150
    DOI: 10.1007/s10614-013-9412-9
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    References listed on IDEAS

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    Cited by:

    1. Xihan Xiong & Zhipeng Wang & Tianxiang Cui & William Knottenbelt & Michael Huth, 2023. "Market Misconduct in Decentralized Finance (DeFi): Analysis, Regulatory Challenges and Policy Implications," Papers 2311.17715, arXiv.org, revised Mar 2024.

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    More about this item

    Keywords

    Stock manipulation; Financial market; Trading behavior; Ramping tricks; G10; C65;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools

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