Lots of people want to know the details on this trade I had on Telupay (TLPY):
The short answer is quite simple: TLPY was announced as the new Stocktips.com stock promotion Friday at 3:43pm. I was one of the very first to receive the promotional emails and Stocktips is currently the most effective stock promoter around (I would never buy most stock promotions — they are only good for shorting) so it was all but certain that the stock would spike, at least for the first 15 minutes or so. (If you sign up for Stocktips or any other promoter, do not ever pay them for anything — just get on their free email list. And never believe what they write — they are scheming scoundrels and pumped stocks inevitably dump big.)
There was a large element of luck to the trade in that sometimes I may be early to receive the emails and other times I may be late — any stock promoter with a big email list will have to use an email service or program to manage their email list and send the emails (in StockTips case it is Aweber). By necessity with a large email list the emails can’t be sent simultaneously so it can take a few minutes to send all of them.
So, knowing that lots of people would be trying to buy TLPY over the next 17 minutes it was an easy decision to buy and buy a lot of shares. Frankly, it was not my intention to take as large a position as I did, but with OTC stocks it is hard to get orders filled so in a situation like this where I expect the stock to quickly spike I put in as many orders as I can and I route those orders to different market makers to increase my chances of getting filled. I also alerted in TimAlerts chat that StockTips had just pumped TLPY:
In this case almost all my orders filled and I ended up long 355,000 shares at about $0.16. I sold 85,500 prior to the close (at an average price of $0.216) and held the rest over the weekend, selling them into the predictable gap up on Monday at an average price of $0.252. (I traded around this initial position a lot, which is why my position size on the Profit.ly trade is so large; my position was never larger than 355,000 shares though.) The initial spike when an effective stock promoter promotes a new stock is by far the most predictable part of the promotion which is why I sold into the gap up — sometimes a stock will drop big after I sell like TLPY did but sometimes it will keep going up. But my goal is to make the easy, low-risk money.
While luck plays a part in trading, and I was certainly lucky to get the email early and get good fills, it is because I know Stocktips pumps well that I was able to send lots of buy orders without hesitation. It is because I am experienced at trading OTC stocks, had hot keys set up to send my orders quickly, and knew where to route my orders that my orders were filled.
While pump and dumps overall are less common and less successful now than they were a couple years ago there are still plenty of opportunities to make money trading them (especially by shorting). If you do trade TLPY or any other pump, just be aware of the risk of SEC trading suspensions (why I never hold a long position overnight after the first day of the pump) and remind yourself that these companies are worthless and will eventually drop big. Here, for example, is a chart of the prior Stocktips pump, ECRY: