【The case of "Investor Protection • Knowing the Rules and Knowing Risks" - Beware of the Traps in the "Limited Daily"】

my country's stock market has a daily limit of 10%, and investors usually interpret the daily limit as the market's optimistic expectations for the stock. The criminals take advantage of the investor's "chasing up" mentality to artificially create a "up limit" to attract investors to follow the trend and buy to push up the stock price. Once the manipulator flees, the stock price will lose its support and even continue to plummet, making the chasing high buy. The small and medium-sized investors who entered became the "takers".

Let's take Tang Moumou as an example to see how the daily limit manipulator works. He completed the whole process of "building a position-pulling-shipping" of manipulating "X" within three trading days, and made an illegal profit of 36.34 million yuan.

On March 23, 2015, Tang Moumou bought 2.14 million shares of "X", the transaction amount was 41.44 million yuan, and the average transaction price was 19.37 yuan, and the position was completed. The next day, Tang Moumou, starting from 10:42 in the morning, pulled the "X" stock price in just 31 minutes at a price of 18.91 yuan to the daily limit of 21.32 yuan and 100 times the total amount declared by other investors at the same level. To the daily limit, the increase rate reached 12.7%. Before closing at noon, "X" briefly opened the daily limit, and Tang Moumou pushed the stock price to the daily limit again within 5 minutes with the limit price and the purchase volume exceeding the selling price by 55 times. After the market opened in the afternoon, Tang Moumou continued to apply for 27.96 million shares at the daily limit price, forming a huge pile of orders to seal the stock price at the daily limit.

Figure 1 On March 24, the "X" stock price was raised to the daily limit and the daily limit was closed

During the opening call auction on March 25, Tang Moumou declared to buy 7 million shares at a price of 23.45 yuan (9.77% higher than the previous closing price), which was close to half of the market's declared buying volume during the same period, and at 9:19 All orders are cancelled before minutes and 48 seconds. According to the trading rules, the order cannot be cancelled after 9:20. Obviously, Tang Moumou's purpose is not to make a real transaction, but to mislead other uninformed investors into thinking that the buying is turbulent and follow up to rush to raise the opening price. Sure enough, "X" opened at a price of 22.8 yuan that day, an increase of 6.94%. Tang Moumou achieved his goal. After the market opened, he shipped in reverse, and successively sold his previous holdings at prices ranging from 22.8 yuan to 21.24 yuan. On the 25th, the "X" price oscillated downward and closed at 21.21 yuan. Investors who followed up at the opening of the market may only be able to sigh and sigh, and Tang Moumou has already made a lot of money.

Figure 2 Time-sharing trend of "X" stock price on March 25

There is an obvious difference between the trading behavior of manipulators who are active on the daily limit and normal investors. They sell in the opposite direction after successfully raising the stock price, or cancel a large number of orders to avoid real transactions, reflecting their intentions in Luring other investors to follow suit without real investment purpose. This kind of behavior violates the provisions of Article 77 of the Securities Law, which prohibits individual or conspiracy, concentrating capital advantage, shareholding advantage to continuously buy and sell, or manipulating securities trading prices or securities trading volumes by other means, and constitutes the Securities Law. Article 203 The situation of market manipulation is of course difficult to escape the scrutiny of the CSRC. In 2014 and 2015, Tang Moumou was punished twice by the CSRC for manipulating the market. To avoid supervision, Tang Moumou moved to Hong Kong and passed the Shanghai-Hong Kong Stock Connect continued to manipulate A-share stocks, "the magic height is one foot high, and the road is one foot high". In 2017, the China Securities Regulatory Commission once again brought Tang Moumou and others to justice, and issued a total of 1.2 billion yuan in fines.

Tang Moumou's behavior tells us that the daily limit may not be "happy and popular", and it may also be a deep scam. Investors should not blindly chase the price of stocks with irrational changes in price. They should comprehensively examine the company's operating performance and development prospects, pay attention to the information disclosure of listed companies or the situation in the same industry, and pay attention to whether the company's intrinsic value has changed. If there is no support from these "fundamentals", the stock price will suddenly rise by the limit, which may be strange. Once you fall into the "trap" set by lawbreakers, you will suffer serious losses. Assuming that investor Xiao Ming was misled by Tang Moumou's manipulative behavior, he couldn't help but buy "X" of 1 million yuan at the opening price of 22.8 yuan on March 25 because he did not buy it at the daily limit the day before, then the floating loss on that day would be nearly 70,000 yuan. Therefore, investors should establish and adhere to the concept of value investing. An important way to avoid losses is not to blindly chase the market, not to participate in excessive speculation in the market, to form good investment habits, and to properly manage and prevent investment risks.