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Imagine Company X' stock price is $400/share. Can two individuals (owning shares of this company) conspire against it by selling/buying their shares at $1 by the end of the day so that the "closing price" is at $1? (and therefore the news will talk about the shares plummeting for this companay...).

Is this technically possible? Are there any protections for this sort of behaviour? Has it occurred before?

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    This strategy is difficult, if not impossible, because the two individuals almost certainly won't be buying/selling with each other. They'll be buying and selling with other players in the market, e.g. market makers, other individuals, etc. – Michael A Apr 16 '15 at 16:58
  • I'm learnig about the stock market so bear with me. If one puts a buying order for $1 and there's another seller wiling to sell for $1....shouldn't that close the deal? – Cracon Apr 16 '15 at 17:04
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    @Cracon not if a third participant has a buy order at, say $400 - your seller would sell a 398 and your buyer would not get anything. – assylias Apr 16 '15 at 18:09
  • Read this article for an explanation of market makers. – Joe Apr 16 '15 at 18:20
  • Have a look at 'Pump and Dump Scheme' This can work either way (Dump first or Pump first). Requires significant effort to advertise misleading information and significant capital to move the stock in order to make public believe your 'inside'. Stock manipulations are illegal as long as I know. – Andy Apr 16 '15 at 23:50
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Firstly the buy order at $1 would be canceled by the exchange as it is too far away from the current price.

Secondly, a limit sell order at $1 (which would probably be cancelled as well) means that you would like to sell at not lower than $1 but at $1 or more than $1. If the current highest bid is $399.99, then this is the price you would sell for (subject to the volume you are selling to the volume bid at $399.99).

The only way you could manipulate the price down is if you owned a very large volume of shares and placed many large volume orders at progressivly lower prices. However, unless this stock had virtually no liquidity, you would never drive the price down from $400 to $1, and you would lose alot of money in the process.

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Generally / Practically NO.

On a highly traded stock, its difficult to achieve what you have mentioned as there will be other trades in time / price priority so the buy and sell of $1 don't match each other. Further timing this as the last day of the trade is difficult.

On a sparsely traded stock [say few shares a day] this is possible.

The other aspect is on most of the stocks there are what is called "circuit breakers" that would halt trading in the particular stock if a high or low or more than x% [say 10%] is reached.

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