RIGGED MARKET Meaning and
Definition
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The term "rigged market" refers to a situation in which financial markets are manipulated or controlled by certain individuals or entities to gain an unfair advantage over other participants. It implies the existence of fraudulent practices or collusion among market participants, intended to deceive or defraud investors and distort market prices.
In a rigged market, the normal rules and principles governing fair competition and transparency are compromised, undermining the integrity and efficiency of the market. Various techniques are employed to rig markets, including insider trading, market manipulation, front-running, and spreading false information.
Insider trading involves using non-public information to make profitable trades, while market manipulation refers to actions taken to artificially inflate or deflate prices for personal gain. Front-running occurs when a broker executes trades on behalf of a client while simultaneously taking advantage of the knowledge of those pending orders to profit on personal trades. Spreading false information involves disseminating inaccurate or misleading data to mislead investors and create artificial market movements.
The consequences of a rigged market can be severe, leading to investor losses, reduced confidence in the financial system, and a lack of trust in the fairness of markets. Regulatory bodies and law enforcement agencies play a crucial role in detecting and preventing market rigging activities, ensuring fair and transparent markets for all participants.
Common Misspellings for RIGGED MARKET
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Etymology of RIGGED MARKET
The word "rigged" in the context of a market refers to a situation where its outcomes or prices are dishonestly manipulated or controlled to gain an unfair advantage. The term "rigged market" originated from the verb "rig", which first appeared around the 17th century. "Rig" initially meant to arrange, equip, or fit something, especially a sailing vessel, with the necessary apparatus or gear. Over time, this term expanded in usage and came to encompass various forms of manipulation and fraudulent activities.
In the context of markets, "rig" means manipulating the market conditions to achieve desired outcomes or prices. A rigged market might involve colluding with other participants, spreading false information, manipulating demand and supply, or using insider knowledge to deceive other market players. The term "rigged market" is often associated with negative connotations and implies an unfair advantage gained by certain participants at the expense of others.
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