Whether someone manipulating TSLA makes money on the manipulation depends upon several factors. So much of the ability to make money depends upon whether we are in an uptrend or a downtrend and whether that particular manipulation succeeds. Here are examples from the easiest to the more difficult, using today's trading as an example.
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Capping
This is probably the most profitable manipulation if it is successful. The secret to short-selling profits is to sell high and then buy low. If you are selling right at the daily high, then your purchase at virtually any other point during the day will be profitable. Let's say the stock rises to 342 and you and your fellow shorts start selling however much is necessary to push the stock below 342. In a typical day, the stock price eventually sinks because you have discouraged the longs and you have encouraged shorts. You buy lower in small increments and walk away with a profit
Mandatory Morning Dip (MMD)
Offhand, this type of manipulation looks like it is more difficult to make money with. You start selling like crazy when the stock price shows some weakness or there is any negative news to build upon. In order for the MMD to be profitable on its own and profitable that same day, you need to buy at a price point that is less than the sell-in price when you began the MMD. Fortunately, algos, weak longs, tag-along shorts, and stop-loss triggers will assist you in seeing the losses continue after you start them. Nonetheless, MMDs are quite often not profitable in the same day. What you need is to use an MMD as a part of a bigger strategy to create and continue a downtrend. Let's say you start selling about 10:30am in the 341-340 range. If you can buy back in the 338 range, great, you've made some money. The problem is that the bottom of the dip comes and goes quickly and you might not be able to buy in lower than you sold. No worries, and here's why. You've just taken one for the team and cannot walk away with a profit that day. Lo and behold, though, the Mandatory Morning Dip is successful at preventing a green day and TSLA opens lower the next day. "The team" consists not only of other shorts but also that rather large accumulation of short selling that you've already done. You buy in the next day when the stock has continued its downtrend and not only has the dip transaction been profitable, but your other short shares are now more valuable because of this effort.
Slow Descent into Closing
This manipulation is much like the Mandatory Morning Dip except for two reasons: 1) you get more bang for your buck with the slow descent into close because volume is lower in late afternoon and 2) because the descent is slower, you have more time to buy after others have taken up the work of depressing the stock and cash out profitably for the day. Your job is to get the rock rolling downhill. Once the trend is established, the usual suspects, algos, weak longs, other shorts, stop-loss triggers, etc. can keep the rock rolling downhill for quite some time.
The Importance of Uptrend vs. Downtrend
So much of the reason for manipulations is to start a downtrend or encourage a downtrend to continue. If the stock price is falling and you are waiting a week to buy and close a short position you created during a manipulation, it's easy money. Virtually all short-seller manipulations are profitable during a downtrend if you wait a few days to close the position you opened to manipulate. The other side of the coin is uptrends in the stock price. You may manipulate during an uptrend to help stop that uptrend, but you're most likely going to lose money on the manipulation. You're "taking one for the team" in that you're helping all the other shorts (and your vast quantities of previously-created short positions), but if you can turn that uptrend into a downtrend then your existing short holdings will benefit greatly. Consider, too, if a capping effort fails. If you were capping at 342 today and the stock suddenly ran up to 350, you're taking a loss for the day. Capping is only profitable if you're successful. If you are unsuccessful, you will lose money,at least from the vantage point of that day's trading.
How do I take advantage of these manipulations? I try to buy during a Mandatory Morning Dip when I'm adding shares. That's very often the low of the day. Sometimes I will buy late on a Friday afternoon, expecting the Amateur hour (first hour of market trading) on Monday to boost the stock enough to sell for a weekend gain. It often works, but I lost money (on paper) this past weekend when we had no run-up in the stock price on Monday morning. I don't have time to day trade and don't really try very often to make short-term money.
Where the patterns have made me money is when I realize that patterns have changed. For example, leading up to November of last year the shorts were very successful in pushing the stock price of TSLA down using these three manipulations. Longs had an underlying dread of the coming SCTY merger, and all the pieces were in place for a downtrend to continue. When TSLA reached about 180, though, the manipulations started to fail. We saw capping that couldn't hold, we saw MMDs that didn't dip nearly far enough, and we saw slow descents into closings turn into rallies into close. I upped my leverage at that point and did a pretty good job of calling the bottom. J19 150 calls were selling for as low as $50/share and I backed the truck up and started loading.
Hoping these thoughts are helpful.
