Which practice involves depositing securities with third parties to constrict the market?

Which practice involves depositing securities with third parties to constrict the market?

• A. Creating a squeeze
• B. Parking
• C. Marking the close
• D. Ramping

Answer: (B)

Parking is the practice of moving securities into the possession of a third party so they’re effectively taken out of circulation. By removing shares from the market, the available supply shrinks, which can create artificial scarcity and put upward pressure on the price. This kind of manipulation relies on constricting liquidity rather than simply trading to influence price. The other actions involve different manipulation methods. Creating a squeeze centers on forcing prices higher by squeezing suppliers or squeezing short positions, not on hiding shares with a custodian. Marking the close focuses on shaping the closing price with orders near the end of a session. Ramping aims to lift prices through heavy buying activity, again not about temporarily depositing securities with a third party.

Parking is the practice of moving securities into the possession of a third party so they’re effectively taken out of circulation. By removing shares from the market, the available supply shrinks, which can create artificial scarcity and put upward pressure on the price. This kind of manipulation relies on constricting liquidity rather than simply trading to influence price.

The other actions involve different manipulation methods. Creating a squeeze centers on forcing prices higher by squeezing suppliers or squeezing short positions, not on hiding shares with a custodian. Marking the close focuses on shaping the closing price with orders near the end of a session. Ramping aims to lift prices through heavy buying activity, again not about temporarily depositing securities with a third party.