Other than causing buyers to move money around, casting a ripple across the globe.
One thing, but not the only thing, that spoofing can do is if an investor places a large buy order, only to cancel it and place a sell order. The buy order drives up the price of some commodity, while the sell order takes advantage of the higher price. The spoof buy order allowed the trader to execute the sell trade at a better price than if the spoof buy order had not been placed.
This strategy works if the trader can place large buy and sell orders that can move the market, while obviously messing with an entire market on a commodity.
Other than causing buyers to move money around, casting a ripple across the globe.
He didn't spoof, he was banging the close (btw how is that a real sentence of english lol..)
"Banging the Close: A manipulative or disruptive trading practice whereby a trader buys or sells a large number of futures contracts during the closing period of a futures contract (that is, the period during which the futures settlement price is determined) in order to benefit an even larger position in an option, swap, or other derivative that is cash settled based on the futures settlement price on that day."
The trading/speculating market for gold futures is larger than the actual physical delivery (closing) market is, but the futures contracts are settled via what the delivery price ends up being. So you can manipulate the delivery price and thus move an even larger market (the futures price).
If you can bet $100 on the outcome of a $10 flip, just pay to intentionally lose the flip and cash in on the side bet instead.
Wouldn't be surprised if he was the guilty party of an incident back in July where the price of gold spiked inexplicably and smashed a bunch of short traders Stop losses, only to have the orders which spiked the price withdrawn by "the liquidity provider". Alot of brokers had to go back and make it right with some traders over this incident and considering Shak has been apparently tied to sometimes as much as 10% of the US Gold futures market this sure as hell sounds like his doing which will just likely add to his list of price manipulation.
All spoofing does is outsmart the other bots looking to front run your orders. Clearly the higher up people have been paid more by the people front running orders.
Seriously. Logically, why would placing a limit order of any kind be considered illegal? (Answer, it confuses the front running bots that suck money from everyone)
I go to an auction. Highest bidder is $2000. Last minute I say $2500. He says $3k, I say $3500 and he gives up. I then say I’m not paying so they go to the next highest bidder, $3000. Would that be fair?
I go to an auction. Highest bidder is $2000. Last minute I say $2500. He says $3k, I say $3500 and he gives up. I then say I’m not paying so they go to the next highest bidder, $3000. Would that be fair?
Creating fake demand or supply seems off
Terrible analogy. In auctions typically each bid is binding when vocalized.
Financial markets are not auctions, the bid has to be hit by a seller to be binding. As I understand spoofing, if someone is fast enough to hit the fake bid you own whatever you were bidding for. I have no idea why this has become a crime, other than algo trading is now measured in nanoseconds so it’s become much harder to hit bids/lift offers before they get taken down.
Terrible analogy. In auctions typically each bid is binding when vocalized.
Financial markets are not auctions, the bid has to be hit by a seller to be binding. As I understand spoofing, if someone is fast enough to hit the fake bid you own whatever you were bidding for. I have no idea why this has become a crime, other than algo trading is now measured in nanoseconds so it’s become much harder to hit bids/lift offers before they get taken down.
Spoof orders don't move prices by faking being the "best price" and then pulling the order away (where a quick buyer could "catch it" before that). Spoof orders are placed higher up in the order book in order to make the bid or ask side look bigger than it actually is. IE make it look like there are more buyers or sellers at a price than there actually is.
So it's more like:
Latest price: 88.5
One seller offering to sell att 88.6 currently.
Spoofer puts a ton of sell orders at 88.7, 88.8, and 88.9, making it look like a lot of people suddenly want to sell. Market freaks out because why does everyone want to sell this thing suddenly?
Spoofer: "j/k", *deletes the orders, takes profits earned by the market confusion*
Imagine if you never know the real price of anything until the order goes through because everyone are just faking price tags everywhere?
Terrible analogy. In auctions typically each bid is binding when vocalized.
Financial markets are not auctions, the bid has to be hit by a seller to be binding. As I understand spoofing, if someone is fast enough to hit the fake bid you own whatever you were bidding for. I have no idea why this has become a crime, other than algo trading is now measured in nanoseconds so it’s become much harder to hit bids/lift offers before they get taken down.
1) clearly you’ve never been to an auction before if you think the winning bid is legally obligated to pay. Unless you put money in escrow you absolutely can back out and it happens often
2) the NYSE is literally called an ‘auction market’ due to its glaring similarities to an auction
Spare me your crap. The point is fake demand alters price discovery
I always think stuff like this should put a nail in the coffin of people who want the U.S. to go back to the gold standard (I.E. every dollar in circulation is backed by a dollar of gold). But it doesn't. Crazies still advocate for things like that.
Not only is it impractical and unrealistic (the amount of dollars in circulation is orders of magnitude greater than all of the gold mined in the history of the world), but there are always stories like this of people (or banks) manipulating the price of gold. Why would any nation link their currency to a commodity that could have its price manipulated so easily?
If a person or a bank could do it, imagine what a hostile nation state could do. Nation states have far more resources available to help manipulate the price of a commodity. If the U.S. linked the dollar to the price of gold, it wouldn't be hard for a country like China to manipulate the price of gold the throw our economy into recession or to cause hyperinflation, etc.
Then answer me this: why isn’t it hard to manipulate a foreign currency? Clue, it’s not hard. Thus your argument is pretty much moot
As to your point about dollars in circulation, all it would take is a higher gold/currency peg to meet demand. It’s pretty simple
With that said there are still issues with a fold back currency just like any monetary imposition the govt or fed would create. But no system would be perfect and gold creates a system that’s impossible to operate with massive amounts of debt. Hence why we’ll likely never see a gold standard in any of our days
I go to an auction. Highest bidder is $2000. Last minute I say $2500. He says $3k, I say $3500 and he gives up. I then say I’m not paying so they go to the next highest bidder, $3000. Would that be fair?
Creating fake demand or supply seems off
Quote:
Originally Posted by brianr
Terrible analogy. In auctions typically each bid is binding when vocalized.
Would a closer analogy be something more like what Carla does here?
EDIT: By the way, something like this happened at an annual fundraising auction my workplace held years ago. One of my co-workers enjoyed meddling with the bidding. He would fire out a bid early on just to get it going, but never having any intention to buy. If someone in the room really wanted the item, he thought, that guy would outbid him, and his money would be safe.
Sure enough, one year there was a car up for bid. Someone donated a used car that was in good shape**. Sure enough, this guy does his thing, and yes, someone on the opposite side of the room starts trying to outbid him to win it. As planned, he gave up after chasing the bidding another $5K. Now he's bragging to everyone because he made the department an extra $5K.
The bad news: the other guy was his officemate, barely making a living at the time, and trying to start out. The auctioneer was using the bid numbers, so neither person knew the other's identity.
And for those who say "F that guy for doing that to his buddy," well, this practice came back to bite him. The next year, he tried doing the same thing. Unfortunately, he put in one too many bids and ended up the winner of an item he didn't actually want (like Rebecca in the video above). It's worth mentioning that attendees at the event sign an agreement that says all bids are binding. This guy ended up with a dog. As I recall, he frantically went around the room trying to find someone else to take it.
(**Note: old folks often unload a car they no longer need, perhaps because one of them is no longer fit to drive, or because they simply don't need multiple vehicles anymore. Best yet, many from the Silent Generation were/are noted for keeping up maintenance. Two of my cars came from just such sellers, and these vehicles were in pristine condition despite close to 100,000 miles on the odometer.)
Last edited by Wilbury Twist; 08-21-2022 at 03:43 AM.
Not only is it impractical and unrealistic (the amount of dollars in circulation is orders of magnitude greater than all of the gold mined in the history of the world), but there are always stories like this of people (or banks) manipulating the price of gold. Why would any nation link their currency to a commodity that could have its price manipulated so easily?
Other than causing buyers to move money around, casting a ripple across the globe.
Nothing really - it just puts orders on the book that someone has to market into. Not sure why this would be considered a crime - I cancel limit orders all the time when sentiment changes.
Quote:
Originally Posted by shhh
it falsely represents high demand where none exists to try and fool “chart readers” into buying.
It happens all the time on any asset. No one should be using resting limit orders as clarity for direction.
Nothing really - it just puts orders on the book that someone has to market into. Not sure why this would be considered a crime - I cancel limit orders all the time when sentiment changes.
It all has to do with intent, or at least provable intent. Yes, people cancel limit orders all the time, no big deal there. But good spoofers place orders in such a way that they will never get taken out. And that's where you can prove a crime occurred.
Read about Navinder Sarao, an individual trading from his parents house who make millions spoofing the e-mini futures. He had a program that would always keep his ask prices three levels away from a trade. And the total of these asks might be eight figures. He would then clean up shorting the market. What he did also exacerbated the flash crash.
Once authorities figured out exactly what he was doing, the proof was easy as he placed those asks with zero intention of them ever being hit.
Quote:
It happens all the time on any asset. No one should be using resting limit orders as clarity for direction.
Then why does every trader use level two quotes?
And yes, individuals and institutions still manipulate the market every day. I see block orders appear and disappear for no apparent reason other than just an algo executing it's program. It's just next to impossible to prove.
It all has to do with intent, or at least provable intent. Yes, people cancel limit orders all the time, no big deal there. But good spoofers place orders in such a way that they will never get taken out. And that's where you can prove a crime occurred.
Read about Navinder Sarao, an individual trading from his parents house who make millions spoofing the e-mini futures. He had a program that would always keep his ask prices three levels away from a trade. And the total of these asks might be eight figures. He would then clean up shorting the market. What he did also exacerbated the flash crash.
Once authorities figured out exactly what he was doing, the proof was easy as he placed those asks with zero intention of them ever being hit.
Then why does every trader use level two quotes?
And yes, individuals and institutions still manipulate the market every day. I see block orders appear and disappear for no apparent reason other than just an algo executing it's program. It's just next to impossible to prove.
Level 2 quotes is just a meme. You can watch it all day long and it won't give you a trade. Even if you think someone is holding up the market with thousands of limit buys, they just cancel those orders when the price gets close to it. It's just resting orders on the order book. You want to see a lot of market longs or shorts coming into the market and the price doesn't move (called order flow or footprint charts) - the limits just eat all the orders and the price will quickly reverse trapping all those traders. It used to work really well on bitcoin until so many different exchanges came up that it was difficult to see which exchange was moving the market. I don't use orderflow as much any more as I found key levels to be respected much more. I still use orderflow but it doesn't help as much as you think. I like ATAS the best
Level 2 quotes is just a meme. You can watch it all day long and it won't give you a trade. Even if you think someone is holding up the market with thousands of limit buys, they just cancel those orders when the price gets close to it. It's just resting orders on the order book. You want to see a lot of market longs or shorts coming into the market and the price doesn't move (called order flow or footprint charts) - the limits just eat all the orders and the price will quickly reverse trapping all those traders. It used to work really well on bitcoin until so many different exchanges came up that it was difficult to see which exchange was moving the market. I don't use orderflow as much any more as I found key levels to be respected much more. I still use orderflow but it doesn't help as much as you think. I like ATAS the best
Order flow is worthless because of wash trading. All the exchanges run massive wash trades to imply volume/liquidity. Millions will be flying off the tape and then you put your $1000 order in and everything just screeches to a halt.
If you can't spot the sucker at the table. Then you are the sucker.
