साझा अर्थ संवाददाता
२३ फागुन २०८१, शुक्रवार
Abhishek Kushwaha
Many people dream of making money in the Nepal Stock Exchange (NEPSE), but only a few succeed in making significant profits. Retail investors buy stocks with the hope of earning returns, but behind the scenes powerful operators control the market. Have you ever wondered, why certain stocks rise by 10% in a single day without any strong reason and also only to fall just as quickly? This is not a coincidence it is the work of operators.
In most stock markets, investors follow technical and fundamental analysis to make decisions. However, in Nepal, there is an additional strategy called "operator analysis." Operators is the powerful investors with huge capital that manipulate stock prices to trap retail investors. In this article, we will uncover how operators manipulate NEPSE, the tactics they use, and how retail investors can protect themselves from falling into their traps.
The Role of Operators in NEPSE:
Have you ever noticed that a certain stock was trading normally and then suddenly rises aggressively, only to drop just as fast? This is a clear sign of market manipulation. Operators are influential individuals or groups with large amounts of money and connections in the stock market. They collaborate with brokers, insiders, and media sources to artificially inflate or crash stock prices.
For example, Nepal Finance (NFS) saw an incredible price increase from NPR 300 to NPR 2,600+ in just a few months. Within 130 days, the stock gained nearly 570%, which is an unnatural movement for a company with weak fundamentals. The price was pushed up aggressively, and many retail investors fell into the trap, buying at high prices due to FOMO (Fear of Missing Out). However, as soon as operators exited, the stock crashed, falling back to around NPR 700.
One suspicious event occurred on August 7, when NFS was in a negative circuit (hitting its daily lower limit) throughout the day, only to suddenly jump to a positive circuit in the final seconds. The same pattern repeated multiple times, showing clear signs of manipulation.
How Do Operators Manipulate the Market ?
Operators use various strategies to manipulate stock prices and deceive retail investors. Here are the most common tactics:
This is one of the oldest tricks in stock market manipulation. First, operators accumulate stocks at low prices. Then, they create hype by spreading rumors on social media, news platforms, and forums. Retail investors, fearing they will miss out and then start buying the stock, pushing the price up. Once the stock reaches a peak then operators sell their shares, making huge profits while retail investors are left holding the stock as its price crashes.
A perfect example of this was seen in NFS, where operators pushed the stock price sky-high before dumping it, leading to a massive crash.
Have you ever looked at the market depth and noticed a large number of buy orders, making it seem like demand is high? This is another trick used by operators. They place fake buy orders to create an illusion of high demand that encouraging retail investors to buy. Once retail investors enter the market then operators remove their fake orders or shift them lower, causing the stock price to drop suddenly.
For example, an operator may place a large buy order at a certain price level, making it look like there is strong demand for the stock. Seeing this, retail investors also start placing buy orders with expecting the stock to rise. However, as soon as retail investors commit, the operator cancels the fake buy orders and starts selling at high prices. This sudden reversal causes the stock price to drop and leaving retail investors in losses.
Similarly, in a bearish scenario, operators place large fake sell orders to make it seem like heavy selling pressure exists. Retail investors panic and sell their shares, only for the operators to remove their fake sell orders and buy at lower prices.
This manipulation distorts market signals and creates artificial price movements that favor the operators while trapping retail investors.
Operators often receive insider information before the general public. For example, before an official company announcement about strong earnings or a new project then operators quietly accumulate shares. Once the news is made public, retail investors rush to buy the stock, unknowingly buying from operators who are selling at high prices.
A recent example of this happened before the announcement of Nepal’s monetary policy in 2024. Large investors had insider information that institutional investment limits would be lifted, so they started aggressively buying stocks. As a result, NEPSE rose to 2,560 points even before the policy was released. Once the policy was announced, operators sold their shares at the level of 3000 pints and then the market declined again.
How Retail Investors Can Protect Themselves:
Since these manipulative practices are common in NEPSE, retail investors must be cautious and avoid falling into these traps. Here are some tips:
Conclusion
Stock market manipulation is not new, but retail investors continue to fall for these traps. Operators control stock prices for their own benefit to making huge profits while small investors suffer losses. By staying informed and avoiding emotional investing. Retail investors can protect themselves from market manipulation and make more informed investment decisions.
Have you ever experienced such manipulation in NEPSE? Share your thoughts in the comments below. And if you found this information valuable, don’t forget to follow to us for more insights on the Nepal stock market !
साझा अर्थ संवाददाता
