Free Republic
Browse · Search
General/Chat
Topics · Post Article

To: ransomnote
As part of their market manipulation scheme, Smith and Nowak placed orders for precious metals futures contracts that they intended to cancel before execution to drive prices on orders they intended to execute on the opposite side of the market.

Understood - but would like to know how, exactly, they intended to profit from the artificially boosted precious metal prices.

J.P. Morgan obviously profited directly, in that they could then charge higher trading fees based on the (slightly) higher prices - like charging 3% on an order of 50,000 ounces of gold at the artificially inflated price of $2,000 / oz. - instead of at the "real" price of, say, $1,990 / oz., thus yielding an additional profit of 3% x $500,000 = $15,000. So that would have been the day's "haul?!" Peanuts!

Regards,

3 posted on 08/24/2023 12:28:32 AM PDT by alexander_busek (Extraordinary claims require extraordinary evidence.)
[ Post Reply | Private Reply | To 1 | View Replies ]


To: alexander_busek

The nature of the fake trades these folks injected into the market were different from what you are positing. They would place large limit orders In the market indicating A sudden high demand for some particular underlying. The limit orders would not fill, But other market participants would see the enhanced demand for a long position, for example, and follow on with their own long orders. And then these guys would place market orders short the market, When these guys then canceled their long limit orders, the perceived demand would apparently disappear from the market. They then placed short bets and the followers of their trading would find themselves on the wrong side of the market. That is how spoofing works.


4 posted on 08/24/2023 1:20:40 AM PDT by Attention Surplus Disorder (The Democrat breadlines will be gluten-free. )
[ Post Reply | Private Reply | To 3 | View Replies ]

Free Republic
Browse · Search
General/Chat
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson