Apple’s $500.00 close was not manipulation

Apple’s $500 close has nothing to do with market manipulation so stop with the conspiracy theory nonsense and learn something!” Rocco Pendola writes for TheStreet. “A small subset of readers will believe what they want to believe no matter what type of information gets placed in front of them, but remember this is coming from one of Apple’s biggest defenders as of late.”

“The big money is not sitting in a room changing the hands of a clock or rolling back miles on an odometer on Friday afternoon to make sure that, magically, AAPL closes where they want it to be,” Pendola writes. “Sorry.”

Pendola writes, “There’s a perfectly logical explanation, illustrated in plain English, as told to me by Neil Pearson, University of Illinois Professor of Finance and Harry A. Brandt Distinguished Professor of Financial Markets and Options, back in May 2011. I researched the subject and contacted the professor to authoritatively counter the pure crap ‘opinion’ that options traders work together to get AAPL to close wherever they want it to close on options expiration day [which was Friday].”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]

Related article:
Why did Apple close at exactly $500 on Friday? – January 19, 2013

59 Comments

    1. Exactly.

      It just “happens” that the closure price is exactly what major options traders needed it to be?

      I don’t believe that events that exact are pure coincidences. No one else should either.

      1. People who sold options needed it to be 500.00. And that’s very simplistic. Options buyers needed it to be anything but 500.00. And before you put your tinfoil hat back on, anyone reading this can sell an option. If you don’t understand the market, you shouldn’t participate.

        1. Exactly. The sellers needed it to be $500. The buyers needed it be “anything else”, but roughly half wanted it to be below $500 and half wanted it to be above $500. Their effects thus cancel out and the stock price is driven to $500, regardless of what’s actually happening at Apple.

          It’s not deliberate manipulation, but that’s splitting hairs. It’s still an artificial force on the fair market price of the stock.

          ——RM

  1. Pendola is a slimy shortseller who has somehow managed to pull the wool over MDN’s eyes (and anyone else who believes that he’s an Apple defender). He’s replaced donkey boy Moritz @ The Street, don’ trust him as far as you can throw him, he’s a FUDster.

    1. Exactly right. He is FUDster when it suits him. He also eliminates the WSJ and media participation in the AAPL downpressure, so it is not just the option traders that are steering the boat here….

    2. Why would anyone believe him to begin with, even if he didn’t have this reputation. He claims to have “researched” his argument, but his research simply consisted of somebody else’s assertions.

  2. It was the master manipulator sending a message. “I control the vertical! I control the horizontal. Most valuable company in the world? Watch this stupid investors. I tap an icon on my phone, enter the stock symbol, enter the end of day price, and voila!. I AM GOD HERE! LANA! LANA! Bring me another beer.”

  3. These people are so full of shit. “readers will believe what they want” – What a douche!

    How much more obvious does this manipulation have to be before our worthless government does something about it

  4. The reality is that the stock is just as likely to close on exactly 500 as it is any other number. We as humans tend to focus on patterns and rounded numbers, so when we see them, it gets our attention.

    1. Ray, Ray, Ray… No, the stock is certainly not “just as likely to close on exactly 500 as another number”
      Absolutely, certainly not.
      What do you think the options market is all about??? Eh?
      Okay, very briefly, it’s about the likely hood of a stock closing on a certain price and guess what? It’s different for different prices.
      I know, amazing isn’t it.?

    1. Exactly. When a guy is able to accurately predict that it will happen over 2 months in advance, it’s hardly just a coincidence or a conspiracy theory. It’s a conspiracy proven as fact.

    2. The guy predicts the trend, the WSJ runs stories with planted lies, others predict the ‘number’ will be around 500 and then it is exactly 500… Right. Nothing but coincidence.

  5. It’s very hard to ignore the fact that the $500 figure for close of business on Friday was talked about at the start of the week and that’s exactly how it worked out, right down to the last penny.

    It could be coincidence, but there comes a point where something is too much of a coincidence and another explanation seems more likely.

    1. Just a thought,,,, Rocco is right about the exact figure of $500.00. But other than that, he is just so full of it.

      He said in one of his articles, “You should think that traders often have similar trade ideas, and as a result sometimes end up with similar positions.” Yeah, think Bernie Madoff!!!

      He was not really lying and ponzie scheming, it just looked that way……. to the tune of several BILLION dollars. Just ask Rocco. /s

      Just a thought.

    1. I saw the MDN headline and thought “Hmm. It will be interesting to see why.” Then I read “writes for TheStreet.com and my thought changed to “WTF, MDN?!? Where is the Think Before You Click™ comment?”
      If you’re going to notify MDN readers that somebody from TheStreet.com has something manipulative/stupid to say, at least put a warning on it for the newbies.
      Geez.

  6. Option traders, some of whom are hedge funds with hundreds of millions to move around, buy or sell to ‘pin’ the stock at the price they want.
    Ok he says it’s hedging, perfectly legal…. but it still sucks and for the small long time investor (the dudes who actually believe in the company and buy stocks as they were originally designed to be, i.e to ‘invest’ in the growth of company ) it still smells of manipulation…

    and who is to say that the hedges don’t spread rumors to ‘pin’ the stock to where they want it to be?

    Jim Cramer who is involved in the theStreet.com famously did an interview where he explained how hedge funds can also ‘help’ manipulate… eh ‘pin’…. aapl by spreading rumours, he called it ‘Fomenting’.

    in his books he wrote that when he was running hedge funds he could manipulate.. eh ‘pin’… stocks by spreading rumours. He said it was easy , just hang out at the bars where the stock brokers and financial analysts and financial reporters hang out. He explained how lazy the financial writers were and that they won’t bother to check a rumour. Then he showed (to observers infront of his computer) how with just a relatively small amount of money by selling and buying he could push the stock of a small company up or down.

      1. Oh Puh-lease ALL large fund managers do this kind of crap. Hell that total sleaze (and hero of the democratic party & “new world socialism”) George Soros actually managed to crash the english pound (thus screwing millions of out of brits their pensions & money) and profiting handsomely from it.
        Cramer is honest enough to admit and explain it. You should be grateful you were enlightened on the specifics.

  7. Many, many, many people had Limit orders set for $500.00 yesterday. It’s a tood sign a lot of people wanted in. With Apple stock hovering around 500.00, the market just happen to close when many, many of those limit orders where being executed.

    1. It doesn’t really matter these days, because fewer and fewer individuals hold stock. Rather, they invest in funds. When you’re investing in a fund, it doesn’t matter what the price of the share is, you get x% of it.

      ——RM

        1. Then do a 5 minute web search and educate yourself. I suggest Motley Fool for beginner investors, but there is plenty of information out there. The 5 minute limit is approximately when you realize what a complete dunce you sound like complaining about the price of the stock.
          The second thing you will realize is what a complete scam mutual funds are. Most don’t make money, and after fees you won’t make money even if they post a gain.
          Do yourself a favor and learn.

  8. What does it matter whether it is deliberate manipulation, or “autonomous” manipulation (for lack of a better word), where the share is pushed to the desired price by forces set up in advance, without no hands-on manipulative trading required?

    Either way, Apple’s share price ends up at $500 with absolutely no regard to the facts underlying company performance. It doesn’t matter that it’s not technically “manipulation”. In the end, the effect on the share price is the same.

    Just consider this reason #4,102 why individual investors should get out of the stock market (and are, in large numbers).

    ——RM

  9. The market is supposed to be based on uncertainty. However options set a price where groups can be guaranteed to make money. Therefore those groups will work out ways to get to the price they need.

  10. > Neil Pearson, University of Illinois Professor of Finance and Harry A. Brandt Distinguished Professor of Financial Markets and Options, the pure crap ‘opinion’ <

    Ad hominem fallacy.

    sum = he's not impartial, ignore him

    1. What happened to my post? This is what it said
      > Neil Pearson, University of Illinois Professor of Finance and Harry A. Brandt Distinguished Professor of Financial Markets and Options, the pure crap ‘opinion’ <
      Ad hominem fallacy.
      sum = he's not impartial, ignore him

  11. Consistent decision processes on a small scale create patterns on a large scale. This is what the article explains and the mechanics of it are fairly easy to understand.

    It’s like ants individually converging on the scent of the previous ant’s trail. They seem to have concerted on the location of food but no actual communication was actually needed between them.

    The real question would be on the reasoning/motivation behind the option price points decided by the hedge funds. The author suggests that traders tend to think alike but that doesn’t fit with the wild variations on APPL stock estimates we see in the media. Don’t these people write options consistently with their predictions ? (which would not result in a convergence on a specific value).

  12. I have to admit that the market manipulators did a formidable job. To me it appeared to be very difficult to keep the stock so far down for such a long time. But they did it. With the help of all the Apple bashing and FUD they spread recently. That’s quite a mighty bunch of manipulators. However, if we small investors know how the big manipulators function we can act accordingly. I hope everyone has filled up their portfolios with AAPL.

  13. Take a look at the NASDAQ after-hours-trading history of AAPL. Very often a fractional daily close becomes an integer value if not a multiple of 5, 10, or 100 at the end. Maybe it is the low volume and low rate of trades but it shows that prices can be influenced by either individuals or groups.

  14. Despite all the ‘Apple Bear’ BS in the world, we know full well that long term investors in AAPL will eventually discover the stock value in line with the company’s value.

    There, that’s how you speak without being manipulative.

  15. The exact closing price was not predetermined, but the relentless onslaught of negative press by WSJ And others over the last three weeks and reaching a fever pitch this week was nothing short of market manipulation.

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