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Question:

I didn't full get what Boiler Room was about.?

I am still young and don't really understand the market. Can you guys explain to me what happened in that movie?

Answer:

essentially, the boiler room is about a group of guys running a scam. what they do is buy penny stocks. these are stocks that don't trade often enough or don't have a lot of shares to trade or aren't very expensive. anyway, these guys buy shares of a company that's about to announce some news, and then they try to sell off their shares when their customers are buying say they bought company X for $1 - they tell their customers that company X is going to jump in price soon and convince them to buy. the minute their customers and more people start buying, they dump their shares for a good profit. because these shares don't often trade, when people start buying the price goes up. fabricating rumors about a small company and getting people to invest money into a stock like this is a quick and easy way to make money. unless you're the last person trying to sell left holding shares when nobody wants to buy it. by the way, this is illegal - which is why the Feds were after them. good con guys find people with money and have them invest small amounts that make good returns. then, when they have their customers' confidence, they convince them to make a big investment in another sure thing - which of course is that time they make a killing and their customer goes broke. hope this helps explain the movie a bit.

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