UK 'flash crash trader'

[Driller]

NicD said:

Scuffers said:

Driller said:

So there's an artificial and virtual money system where people make more of this virtual money by manipulating things on their computer screens, this guy finds a slightly quicker way of manipulating the digits and they take exception to this and arrest him and put him on trial?

It's a crazy world.

that's actually not far off....

Actually, its not even close if you can be bothered to read the detail (I cant be bothered to explain but it is all in the links above)
The trades were fraudulently submitted (as the Exchange has rules) and that is why he has been charged.
In his defence, it seems others do the same.

Rules eh? You mean he pushed his binary code digit 2nm too much to the left and the umpire gave him a red card?

[NicD]

Driller said:

Rules eh? You mean he pushed his binary code digit 2nm too much to the left and the umpire gave him a red card?

He created a false market, can you understand that?
It is serious st.

[Driller]

NicD said:

Driller said:

Rules eh? You mean he pushed his binary code digit 2nm too much to the left and the umpire gave him a red card?

He created a false market, can you understand that?
It is serious st.

It's not serious st, it's fking hilarious.

The utter hypocracy of having "rules" in a system which serves no useful purpose whatsoever except to manipulate virtual money to make even more virtual money and where each person tries as hard as they can to fk over the guy standing next to them using the most devious, cunning and underhand tactics they can find, not to mention all the other people being fked over by such a system that they have no say in or power over.

And then taking a guy to court because he's been "bad" by breaking these "rules".

Best joke ever

[Hoofy]

TBH I don't see the problem with spoofing. I see people do it all the time in sports markets. And sometimes, those "spoof" offers get taken.

[9mm]

I gather he didn't raise the bail money.

[NicD]

HMRC will want to talk to him about the offshore accounts

[hidetheelephants]

fblm said:

hidetheelephants said:

fblm said:

You've lost me. Are you saying the negatives outweigh the benefits listed.

Yes. The vapid pursuit of this financial castle built on sand sucks capital from things that actually create value, i.e. every other sector of the economy. The tail is wagging the dog in a way that is unbalanced if not positively unhealthy.

OK

Sterling defence you've offered; thanks for sharing your thoughts.

[Countdown]

hidetheelephants said:

fblm said:

hidetheelephants said:

fblm said:

You've lost me. Are you saying the negatives outweigh the benefits listed.

Yes. The vapid pursuit of this financial castle built on sand sucks capital from things that actually create value, i.e. every other sector of the economy. The tail is wagging the dog in a way that is unbalanced if not positively unhealthy.

OK

Sterling defence you've offered; thanks for sharing your thoughts.

In fairness financial traders just do what any other trader does - they buy something and then try to sell it for a higher price. Whilst they might not "create" anything they're still providing a service.

That is different to this particular case which seems to be suggesting market manipulation.

[Chim]

This might be a stupid question, but surely you have to own the stock in the first place before you can actually put it up for sale. If this is the case he must have owned one hell of a lot of stock in order to impact the market to this degree. If this is not the case surely the obvious answer is that you must actually own something before you can actually put it up for sale in the first place.

[NicD]

Chim said:

This might be a stupid question, but surely you have to own the stock in the first place before you can actually put it up for sale. If this is the case he must have owned one hell of a lot of stock in order to impact the market to this degree. If this is not the case surely the obvious answer is that you must actually own something before you can actually put it up for sale in the first place.

You can buy (long) or sell (short) the contracts at your whim.

What you can't do is place thousands of orders just out of reach of the current price to create the illusion of lots of sellers (or buyers) and cancel them as the market price gets close to your offer.

Its called fraud (market abuse).

[Chim]

NicD said:

Chim said:

This might be a stupid question, but surely you have to own the stock in the first place before you can actually put it up for sale. If this is the case he must have owned one hell of a lot of stock in order to impact the market to this degree. If this is not the case surely the obvious answer is that you must actually own something before you can actually put it up for sale in the first place.

You can buy (long) or sell (short) the contracts at your whim.

What you can't do is place thousands of orders just out of reach of the current price to create the illusion of lots of sellers (or buyers) and cancel them as the market price gets close to your offer.

Its called fraud (market abuse).

So you can actually put on order in to sell stuff you do not actually own. This seems like a kinda stupid system. If they join the rest of us in the real world and are only allowed to sell stock they actually own the the problem goes away

[NicD]

Chim said:

So you can actually put on order in to sell stuff you do not actually own. This seems like a kinda stupid system. If they join the rest of us in the real world and are only allowed to sell stock they actually own the the problem goes away

The practise is given some kind of cover by stock owners (or more likely, custodians) loaning it out to the shorters.

This is interesting also:

'During the flash crash, Navinder Sarao apparently used Jon Corzine’s now defunct MF Global to place orders and clear trades. Why didn’t MF Global see what he was up to, or at least call him to ask him about it?
There’s now a big business on Wall Street of firms renting out their HFT infrastructure to prop shops.'
http://www.iol.co.za/business/international/brit-f...

[Hoofy]

Chim said:

So you can actually put on order in to sell stuff you do not actually own. This seems like a kinda stupid system. If they join the rest of us in the real world and are only allowed to sell stock they actually own the the problem goes away

Just punish them by taking their offer.

[Mr E]

Chim said:

So you can actually put on order in to sell stuff you do not actually own. This seems like a kinda stupid system. If they join the rest of us in the real world and are only allowed to sell stock they actually own the the problem goes away

An awful lot of businesses sell things they don't own, and then place the order. Quite a lot of buinesses sell solutions that don't actually exist at the time the contract is signed.

[paul0843]

Mr E said:

Chim said:

So you can actually put on order in to sell stuff you do not actually own. This seems like a kinda stupid system. If they join the rest of us in the real world and are only allowed to sell stock they actually own the the problem goes away

An awful lot of businesses sell things they don't own, and then place the order. Quite a lot of buinesses sell solutions that don't actually exist at the time the contract is signed.

I do this all day long..for the last 28 years..
Take an order to supply something,then source it.
Even though I haven't got a clue where I will be sourcing sometimes...

only worry about this
after I have an order and not before.

[Mr Whippy]

Stocks pumped to all time highs, check.

Smart money out, dumb money in, check.

"Lone" patsy terrorist market crasher, check.

Ready to go!

Edited by Mr Whippy on Sunday 26th April 21:07

[OtherBusiness]

Bears on their way then!

[anonymous-user]

hidetheelephants said:

fblm said:

hidetheelephants said:

fblm said:

You've lost me. Are you saying the negatives outweigh the benefits listed.

Yes. The vapid pursuit of this financial castle built on sand sucks capital from things that actually create value, i.e. every other sector of the economy. The tail is wagging the dog in a way that is unbalanced if not positively unhealthy.

OK

Sterling defence you've offered; thanks for sharing your thoughts.

You asked a question which I foolishly answered. You came back asking the same question. You dont appear to want an answer you just want a whiney little rant about something you've already made your mind up on. I'm a little confused as to why you think I owe you any kind of a defence of HFT! My thoughts on the thread are posted earlier so you're welcome.

[hidetheelephants]

It offers little that manual trading didn't before, just more of it and with less control.

[johnfm]

fblm said:

ReallyReallyGood said:

I would suspect his firm's trading software is running on a server co-located at the exchange, with practically zero network latency, as all HFT firms do. From the UK all he needs to do is tweak some parameters that control the algorithm's behaviour, but the order execution can be done in the US.

You think it would be affordable for a guy reportedly making $10m a year, I thought space on those servers was more expensive and restricted than that? Not my area I admit. If he were running such a simple scam the major HFT's would have been all over it in no time. In any event does a strategy that supposedly enters a big sell order, buys on dip, cancels sell order, sells on uptick really make money on a day the market collapses 1000 points; IMO it gets run over, badly. Something doesn't add up here. IMO either he is far, far more sophisticated than reported or he is being stitched up.

It is yet more US regulator going after UK targets. Amazing that in 5 years since the blip this guy is the ONLY traders they have found spoofing?

I call absolute and total bks. Now way this guy crashed a $20TN market - but the regulators do not have the balls to sniff around GS et al.

The UK government should be stepping in here.