Er, it's a big stretch to say that sort of thing works in the stock market.
When people are going to buy a certain stock, they don't usually look at the whole order book and say "oh, the highest ask is 200, so this best ask at 100 is really good". They look primarily at recent prices and the best ask and bid, and secondarily at the top 5 or so bids and asks. If you put an order that's double of the last price, it will be far away from those top 5. And it's very unlikely that your order is going to be matched any time soon even if the stock moves up (some exchanges actually suspend trading of a symbol before its price can rise by 100% in one day).
Theoretically, it could work for illiquid stocks, but even then it's not trivial to do since 1) people will still look at historical prices, 2) it's risky, since it costs money to setup and you have no guarantee anyone will fall into your trap; because the stock is illiquid, it might cost you money to undo the setup 3) it's considered illegal market manipulation in some (most?) places, and you can easily get caught.
I believe both you and parent are correct.
What about 1 off situations that remove the standard options for gauging value. The situations I have in mind are IPOs and one-off strange happenings. The particular instances I have in mind are the Facebook IPO and the situations where the markets wake up in the AM to a so-called new world. Situations such as when something big has happened. Companies hit by natural disaster, countries governments disintegrating or wars starting etc. These result in sudden big changes in company fortunes that are reflected in stock markets.
When people are going to buy a certain stock, they don't usually look at the whole order book and say "oh, the highest ask is 200, so this best ask at 100 is really good". They look primarily at recent prices and the best ask and bid, and secondarily at the top 5 or so bids and asks. If you put an order that's double of the last price, it will be far away from those top 5. And it's very unlikely that your order is going to be matched any time soon even if the stock moves up (some exchanges actually suspend trading of a symbol before its price can rise by 100% in one day).
Theoretically, it could work for illiquid stocks, but even then it's not trivial to do since 1) people will still look at historical prices, 2) it's risky, since it costs money to setup and you have no guarantee anyone will fall into your trap; because the stock is illiquid, it might cost you money to undo the setup 3) it's considered illegal market manipulation in some (most?) places, and you can easily get caught.