Bush Futures Being Manipulated

http://www.poorandstupid.com ^ | 10/16/04 | Donald Luskin

[traderrob6]

There is now no question whatsoever that the Bush re-election futures contract at Tradesports.com is being manipulated. Yesterday the price of futures were sold down from about 55 (indicating a market estimate of 55% probability of Bush's re-election) to 10 (indicating a 10% probability)with a single 10,000-lot order entered by a single trader. An order that size represents twice the normal volume of an entire typical day's trading. Within moments after the order was completed, the price recovered back to the low to mid-50s

[traderrob6]

There is now no question whatsoever that the Bush re-election futures contract at Tradesports.com is being manipulated. Yesterday the price of futures were sold down from about 55 (indicating a market estimate of 55% probability of Bush's re-election) to 10 (indicating a 10% probability) with a single 10,000-lot order entered by a single trader. An order that size represents twice the normal volume of an entire typical day's trading. Within moments after the order was completed, the price recovered back to the low to mid-50s According to sources at Tradesports yesterdays order was made by the same individual who had heavily sold the Bush futures three times over the last month. The first instance was on September 14 when the trader sold the futures down from the mid 60s to 49.6. The second instance was in the middle of the second presidential debate on October 8 when the futures were sold down from thwe high 50s to 51.5. The third instance was right after the third presidential debate on October 13. As the debate began the futures were priced at 57, and by the end of the debate they had risen to 60. Then a few moments later they were beaten down to 54 in a matter of minutes. In markets this sort of behavior is called a "speculative attack". The idea is not to sell at the highest price possible --the normal profit-maximizing strategy of a typical seller. Rather the idea is to use ones selling to deliberately cause prices to fall. Why would any sane trader try on purpose to sell at low prices? In some cases it is in order to panic other traders into selling at even lower prices, so that the attacker can buy back what he sold at a profit--traders call that a "bear raid". But in a speculative attack the motive is more complicated. It is to cause people in the real world--not just other traders--to panic. The classic example of a speculative attack is when George Soros massively shorted the British pound in September, 1992. The Bank of England was obliged to support the pounds exchange rate under the European Exchange Rate Mechanism. With the pound plunging and the BoE pouring billions into supporting it, prospects for the British economy were damaged-- making the pound even weaker. Eventually the BoE exhausted it's will to support the pound, and had to pull out of the ERM--the pound collapsed--and Soros is said to have made a billion dollars on the speculative attack. It's all based on what Soros has often written about as his "theory of reflexivity". It's when financial markets affect the real world and then the real world in turn affects financial markets. It's a vicious cycle set in motion on purpose. Here's a speculation of a different sort: could Soros be behind the manipulation of Tradesports Bush futures? The amounts of money are pocket change to Soros. And it would fit his avowed intention to unseat the president. It would be a cheap way for Soros to damage Bush's credibility and panic his troops. I have no idea if Soros is behind this or not. But it would fit.

[SmithL]

So, what did it cost him?

[AdamSelene235]

Soros,soros,blah blah blah.

"Who keeps the metric system down?/We do! We do!/Who leaves Atlantis off the maps? Who keeps the Martians under wraps?/We do! We do!"

[hoosiermama]

Soros was the first thing that popped into my head when I read the headline.....The second thing was the African Queen, T-Rex.

[Jeff Head]

They may mock, they may manipulate...but they shall mourn.

I'm calling it for Bush right now.

[Texas Eagle]

Okay. I'm still not totally sure exactly what Tradesports is or does but from what I've gathered, if a person buys Bush stock at say 45 cents and he wins, that person gets a dollar for every share of stock he bought. So he or she would make a 55 cent profit per stock.

Am I getting closer?

[bayourod]

Obviously someone acting on insider information. Probably a time traveler, or Rove himself who has been bought off by a billion dollar bribe from Terazza to throw the election. The FEC should prosecute.

[WoofDog123]

"Yesterday the price of futures were sold down from about 55 (indicating a market estimate of 55% probability of Bush's re-election) to 10 (indicating a 10% probability)with a single 10,000-lot order entered by a single trader. An order that size represents twice the normal volume of an entire typical day's trading. Within moments after the order was completed, the price recovered back to the low to mid-50s"

As I have posted elsewhere, this was almost certainly a mis-entered trade, and the seller took a big hit if it wasn't busted. I wonder what the clearly erroneous policy in that market is.....

[Texas Eagle]

So if a buyer of Bush stock buys at the lower price and he wins, he makes more of a profit correct?

Conversely, Soros would lose more money right?

I mean, he is driving the price of Bush stock down by buying Kerry stock, right?

[traderrob6]

You buy a contact at whatever the going price say 53.5 right now. Contracts are sold in lots of 10 shares. So a contact purchased at 53.5 would return you 100

[Texas Eagle]

Only if Bush wins, correct?

[traderrob6]

Correct

[Texas Eagle]

Thank you. So if I bought a thousand shares of Bush at 53.5 cents, that would cost me 535 dollars.

If Bush wins, I would get 1000 dollars back or a 465 dollar profit. Yes?

[Keith]

"Who holds back the electric car, who made Steve Guttenberg a star?"...

[traderrob6]

sumthin like that

[Texas Eagle]

Hmmmmm.....so if I were to buy 10,000 shares of Bush it would cost me 5,350 dollars and after he wins I would get 4650 dollars.

Vedddddddy interesting.

I missed out on the unleaded gasoline buy. I wonder......

[Williams]

I find the facination with this amusing, maybe troubling. Conservatives running around touting how this really predicts the election "because people are putting their cash on the line..." Oy. And then everyone gets upset if Bush futures aren't high enough. Reminds me of the fact almost no mutual fund managers can beat the index funds, and didn't monkeys picking stocks at random always outperform the pros?

[Oblongata]

Hell, if I sell 10,000 shares at 55, that's 55K(not real value but a benchmark). Price drops to 10, I buy back 10,000 shares at 10, 5 minutes later they are back to 55, and I sell 10,000 again. I just made 45K in 5minutes right? I'm sure this is illegal and against tradesports rules, right?

[traderrob6]

wheres the illegality?

[traderrob6]

These futures markets IEM and Tradesports have consistently been more accurate in predicting the winner than the polls