Broker Fraud

DionysusToast

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Dec 6, 2009
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#16
Appreciate what you say DT, yes, the price someone bid can drag execution prices down, this bid price then disappears from the record. But doesn't that just lead back to the original question? - was the trade based on genuine prices offered or was it a case of spoofing?
A reduced bid should not trigger a stop at all. Only an order should - BUT - that presumes specific stop rules. I'm thinking CME.

Obviously, this isn't the CME, so different rules seem to be there.

What the punter needs to know here is quite simple - why did the stop get executed - the broker should be able to point to published rules. It'll either be....

1 - the exchange rules caused the stop
2 - some sort of process at the broker fired the stop based on the bid going way below the stop price - almost a margin call type thing. At that point, it could be that the best Bid was on NEX and it got executed there

First thing to do in this situation is to simply ask why the stop was executed. Based on what rules.

The chances the broker stole his money are close to zero. As has been pointed out - it makes no sense - the risk far outweighs the rewards.

The OP is talking about multiple parties colluding to defraud him of 700 quid. This is a lot less likely than him not being aware of the rules. For sure, he's made 1 rookie mistake of thinking historical executions on a chart represent "price" when the prices available at any one time are NOT on the chart.
 
Likes: tomorton

DionysusToast

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#17
Appreciate what you say DT, yes, the price someone bid can drag execution prices down, this bid price then disappears from the record. But doesn't that just lead back to the original question? - was the trade based on genuine prices offered or was it a case of spoofing?
Re: spoofing...

You cant spoof the inside bid down in theory...

But if you are the sole MM active on any specific illiquid market, you have a hell of a lot of scope for pushing stuff about.

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tomorton

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Feb 28, 2002
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#18
Re: spoofing...

You cant spoof the inside bid down in theory...

But if you are the sole MM active on any specific illiquid market, you have a hell of a lot of scope for pushing stuff about.

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This is unfamiliar territory where I never tread my trading boots.

So.......... you think maybe that COULD have happened here?
 

DionysusToast

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#19
This is unfamiliar territory where I never tread my trading boots.

So.......... you think maybe that COULD have happened here?
Hard to know without the broker telling why the stop was triggered.

The broker should be able to reference published rules.

It's a good lesson in avoiding illiquid markets for sure. Wouldnt happen on SPY...

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