Pump and dump schemes aren’t just for shady penny stocks and meme coins. They happen in major stocks, cryptos and even big-name tech companies. The game is simple: Hype up an asset, get people to buy in at inflated prices, then quietly sell before the crowd realizes what’s happening.
The Playbook Is Always the Same
You’ve seen it before. A CEO makes the rounds on financial media, talking up a stock right before unloading shares. Wall Street analysts slap a “strong buy” on a stock that’s already up 100% in a month.
Big-name investors flood social media, telling everyone why Bitcoin is going to the moon — right before they dump it.
Take MicroStrategy (MSTR), for example. Its executive chairman, Michael Saylor, started making bullish Bitcoin claims on TV and podcasts when the stock was around $440.
That got retail traders excited. But instead of riding the hype, the stock tanked to $250, leaving late buyers holding the bag.
Nvidia (NVDA) is another example. The stock soared as analysts hyped AI, but look what happened when the CEO started selling shares at $144. That wasn’t random. Insiders know when a stock is overheated, and they cash out before reality sets in.
Crypto is definitely not immune…
When Bitcoin dropped recently, Donald Trump Jr. and Saylor were out in full force, telling people to “buy the dip.” And guess what? They weren’t buying — they were selling into the hype.
How to Spot a Pump and Dump Before It’s Too Late
These setups follow the same script. Here’s how to catch them early:
- Watch for insider selling: If a company’s executives are dumping shares while hyping the stock, that’s a red flag.
- Ignore the media frenzy: When everyone is screaming “buy,” it’s probably too late. If a stock is up 50% in a few weeks, assume smart money got in early and is looking for an exit.
- Look at historical patterns: Stocks and cryptos that have been pumped before will likely be pumped again. Learn their cycles.
- Check short interest: If a stock is heavily shorted and suddenly surges on vague news, it’s likely a setup.
There’s nothing illegal about buying into hype, but it’s a dangerous game. If you’re late to the party, odds are you’re the exit liquidity for someone else. If you want a safer approach, look at defensive plays in Health Care (XLV) or Consumer Staples (XLP).
The bottom line? Don’t get caught in the illusion. The stock market isn’t about what’s fair — it’s about who’s first.
Order Flow:
*This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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