I know this isn’t that practical and is prone to pump and dump I’m not trying to set up a scheme I have £60 in stocks this is just a discussion, but I was thinking that if a bunch of freetrade users let’s say all decided to buy Sirius minerals stock as it’s very cheap we could make a difference to the market. Could this work in practice?
I doubt a small group of retailers can make a significant impact on the value of a stock. It’s usually institutional investors and market makers that move prices, to my understanding.
Though, for a low volume stock with low liquidity on a smaller index like AIM, it could be possible, depending on how many people join the scheme, and the capital they deploy on the said stock.
i honestly would like to make a group of investors who all make the same decisions on stock. As I like to invest with the knowledge I might positively affect the economy. Problem is people will get greedy. Also the fact is you would never get enough money.
Also, what you’re describing is essentially what a fund is doing, but way more organised and regulated.
On an amateur level, I doubt you would ever get many people to agree on an particular position on an individual ticker, and make a coordinated move. There would be many incentives to cheat on the others, etc. Another problem is decision making. Why make your move and not mine? Etc.
As I like to invest with the knowledge I might positively affect the economy.
When you’re investing, you’re already doing that. You indirectly fund the company (by producing demand for its stock, which hopefully should increase price, which in effect increases the market cap of the company, usually allowing it greater access to funding through loans for example). Also, depending on how much stock you own, you could theoretically go to its AGM and vote on issues that are important to you. Or you could go the Ethical Investing route for example, and only invest in companies that fulfil some specific criteria for you. Or you could just not fund entire sectors (like weapons manufacturers, tobacco companies, etc) refusing liquidity and market cap increases, etc.
You’re also providing liquidity to other parties, which is also important for a healthy market to function.
You’re welcome to ask about whether a large group of orders would move the market in a hypothetical situation, along with anything else that you’d like to know about how the stock market works.
But please remember that we ask members of this community not to recommend particular investments here & also, regardless of your motivation, the type of thing that you’re describing sounds a lot like it would be an attempt at market manipulation. So we won’t allow this community to be used to coordinate purchases of particular stocks.
It’s definently hypothetical I have £60 I’m not going to make a difference.
How do AGMS work. I own about £5-15 worth of stock in like 10 companies. Would I be able to show up?
Not at the moment I’m afraid -