From time to time I see large pumps that lead to a sudden 300% value increase. How are people initiating such a pump able to profit from it since many times the prices plumits right after.
300% of what? How many bitcoins did it cost them to eat that far into the sell side of the order-book?
Might it merely be people who decided what to buy and simply bought it?
For example right now you can buy DeVCoin for less than 100 satoshis a coin. If someone decided they wanted to buy a few hundred million to put away for a few years or for their expected child's college fund or whatever, they would drive the price up almost a satoshi per half-million coins.
They might figure so what, the average price they'd get them for would still be less than 350 satoshis per coin even if they bought pretty much the entire sell-side of the order-book, and be happy with that figuring by the time their descendants dig out the pieces of the cold-wallet and put them together to get at the coins they will be worth thousands of satoshis per coin or more...
Or look at I0Coin or IXCoin, many times all you can see on the sell-side is my offers to sell 10 of them, and not even ten at each satoshi of price, heck sometimes many of the offers are 25 satoshis apart as I first put offers at each thousand then at each 500 then at each 250 and so on, when you see an offer every five it means I have that part of the price range getting close to being fully populated - but only with initial sketch offers of 10 coins. Someone who decides they want a few thousand clears a huge swathe of such offers. Same applies on the buy side, I can try to pile up little offers all the way up to try to get the buy side up close to the sell side after someone did a buy that cleared a huge swathe of the sell side, but someone dumping a few thousand blows them all away in one buy too.
It is going to take time to build up large enough offers, densely enough packed, on both sides of all the order-books even on an exchange like Vircurex that doesn't spam the user with billions of worthless coins making the job of filling the order-books ever harder.
Hopefully VIrcurex will add an option soon to let you tell it to fill all prices between a start price and an end price with offers using X number of whatevers, then people will be able to re-fill such gaps in the order-books a lot easier. But as far as I know Vircurex is the only exchange that is even considering making such an option available so expect massive gaps on other exchanges even after Vircurex has that tool in place.
-MarkM-
