Comment Re:Finally some use for my spam! (Score 2, Insightful) 159
Except that if you read the story you'll see that while the spammer makes money, buyers of the stocks usually lose. It seems that stocks typically lose 4-7% of their value on the days after the spam run. The spammers make their money by buying the day before and selling the day after; buying the spam on the same day that you see the first spams is unlikely to give you the same return.
Some people have considered shorting the stocks they see advertised on the assumption that the stocks will go down in value ("shorting" a stock is essentially making a bet that the stock will lose value). I don't think the study addresses that, but it also looks like a risky strategy: there are too many uncertainties involved, not least of which that the spammer will continue pumping out the spam (and pumping up the price) and you'll end up having to buy the stock at a higher price.
Trading in spammed stocks is just a complicated way to give spammers your money. You might do better just to write them a check and save yourself the broker's fee.
Some people have considered shorting the stocks they see advertised on the assumption that the stocks will go down in value ("shorting" a stock is essentially making a bet that the stock will lose value). I don't think the study addresses that, but it also looks like a risky strategy: there are too many uncertainties involved, not least of which that the spammer will continue pumping out the spam (and pumping up the price) and you'll end up having to buy the stock at a higher price.
Trading in spammed stocks is just a complicated way to give spammers your money. You might do better just to write them a check and save yourself the broker's fee.
