u/Acrobatic-Fault876 ·
Reddit — r/smallstreetbets
· June 30, 2026 at 17:04
· ⬆ 22 pts
· 💬 14 comments
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A short ladder attack is designed to create a completely artificial panic by making it look like everyone is suddenly selling. How do they pull this off you mask? Allow me to explain how it works:
Two or more funds trade the same block of shares back and forth with each other at incrementally lower fractions of a cent. For example, Fund A sells to Fund B for $10.00. Fund B sells it right back to Fund A for $9.99. Fund A sells it back for $9.98.
Because they are executing thousands of these trades per second, the market ticker simply registers a massive volume of shares moving at lower and lower prices. Retail traders ( the everyday person ) see the price plummeting, assume the squeeze is over, and sell their real shares at a loss. The hedge funds then scoop up those real retail shares to cover their short positions.