Posted on 04/22/2015 12:45:28 PM PDT by Zeneta
UK trader in fraud arrest over US 'flash crash'
A financial trader has been arrested in the UK after US authorities accused him of contributing to the 2010 Wall Street "flash crash".
The US Department of Justice wants to extradite Navinder Singh Sarao, 36, on charges of wire fraud, commodities fraud and market manipulation.
The crash wiped billions of dollars off the value of US shares in minutes.
(Excerpt) Read more at bbc.com ...
"This is like something out of a thriller - it's a most remarkable story," the BBC's economics editor Robert Peston said.
"The allegation is that he was sending what are known as spoof orders to sell futures contracts in the US stock market. He would drive the price of the stock down... then withdraw the sell orders, but the price would already have fallen.
"He would then buy the orders back and guarantee a profit for himself. According the charge sheet, he did this thousands and thousands of times over many years.
"This is an amazing insight into the way computers have completely transformed the stock market business."
snip
Very Interesting
This guy was very clever and actually exposed some underlying problems within our “Electronic Trading” systems.
It’s not likely he intended to trigger a “Flash Crash”.
I believe his has become a scape-goat.
I used to do this stuff manually.
It’s basically game theory stuff that falls within the rules of trading on most exchanges.
If “I” do something, it will prompt “someone else” to do something in response. If “I” have a really good idea of what “they” will do, then I can position myself to take advantage of their reactions/stupidity.
Same sort of BS as Libyas problems were all caused by a YouTube video
Same sort of BS as Libyas problems were all caused by a YouTube video
Yes, the same, But different.
Not like Reece’s peanut butter cups and the Crunchy Reece’s which were clearly the same, but different.
Wasn’t there a British commodities trader that sunk the oldest bank in the country?
Wasn’t there a British commodities trader that sunk the oldest bank in the country?
Yes there was.
He found a way to hide his losses internally while he attempted to dig himself out.
Pretty messed up, imagine the stress he was going through during that time.
I’ve known of multiple instances in which a trader makes a mistake and instead of reaching out for help, he either tries to hide it or simply walks out.
Have you ever had the counter-party to your trade call you to “Bust” the trade because of a “Mistake”? I have, many times. There is a weird honor system that exists and is something I respect.
This is not a game for “retail investors”.
Game theory as in the stuff John F. Nash did?
I’m certainly familiar with John Nash but in the trenches of trading, I’m not sure of how much it is applicable.
There’s both a logical reaction and an emotional reaction to new data that is made available in real time.
Always, and I mean always, you need to know who is on the other side of your trade.
I made boat loads of money by literally forcing a NYSE Specialist to include my orders in his attempt to make a profit. I knew what he was doing and I knew the rules he had to follow and I had the access.
So, I was gaming the gamers.
What ?
No reply?
I was hoping to give you a raft of S88t.
Just for my entertainment.
Did I forget the sarcasm tag?
Thanks for expressing a bit more honesty than your previous posts have suggested.
I was the guy that jammed up the NYSE Specialist with orders that cut into his profits.
That’s how markets work.
We took the fat out of the system and made for a more transparent playing field.
Our success led to the full automation of orders and any number of alog’s and “dark markets” that have left the average retail trader/investor spinning their wheels.
I have a boat load of respect for successful floor traders.
A rare breed to be sure.
Richard Dennis and his “Turtles”
Legendary.
He told the Wall Street Journal in 1991 that he could publish his trading system/rules and that it wouldn’t matter because 90% of people would be unable to follow them.
Then, there is the Richie Brothers.
“God in the Pits”
http://www.amazon.com/God-Pits-Confessions-Commodoties-Trader/dp/0964695227
I don’t follow any markets anymore. what’s the point. too old for the risk taking. I NEVER said I was a floor trader in any of my posts! that was assumed when I said I was on the floor. You must know that compliance analysts are on the floor twice a day. An I kind of think, from what I sae, and experience with brother in law, they are ahimals that will kill to make a buck. but that’s just me. I’m not expressing a BIT more honesty. I never iied. Have a good one :)
Yes, floor traders can be animals.
And they should be.
Trading markets is the most raw expression of human nature ever devised.
All the frauds get weeded out.
Any idea that markets go “up or down” based on some political theme of the day is just stupid.
That said, our markets are not free to find the balance that would natural occur if Central Bankers around the world continue with their interventions.
It’s not a conspiracy mind you, it’s their mandate and the only tool they have available to them.
I recommend the reading of “God in the Pits”
It’s not really about trading.
It’s about life.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.