What is Knock On?
Knock On refers to the act of two or more stock trading counterparts engaging in false or collusive transactions with the aim of artificially manipulating market prices or increasing trading volume. Such actions are generally illegal, violating the principles of fairness and transparency in the securities market.
Knock On typically involves coordinated trades between two counterparts. One counterpart buys a stock, while the other sells an equal quantity of the stock at a pre-agreed time and price. In this way, the counterparts create an illusion of trading volume and price movement through coordinated buying and selling.
Key Points to Note About Knock On
What is the purpose of Knock On?
The main purpose of Knock On is to manipulate stock prices and create an illusion of trading volume and price movement, thereby attracting other investors to the market or securing better trading conditions.
Is Knock On legal?
Knock On is an illegal activity that violates the principles of fairness and transparency in the securities market. It is considered a form of market manipulation and fraud, and is strictly regulated by securities regulatory authorities.
What are the consequences of Knock On?
Knock On harms the fairness and transparency of the market, potentially leading to financial losses for other investors. If detected, securities regulators will investigate and take legal action against the violators.
How can Knock On be prevented?
To prevent Knock On, stock exchanges and regulatory bodies implement various regulatory measures and technological means. These include monitoring trading activities, identifying unusual trading patterns, enhancing disclosure of trading data, and enforcing compliance requirements. Additionally, raising investors' awareness and knowledge levels is also a vital measure to prevent Knock On.
