Uk Trader Blamed For Flash Crash

[mike.]

Hi Mike

Lol - its should be "Forexmospherian from Fenny Drayton" - but it does not have quite the same ring to it

Has the Hound from Hounslow paid his £5 million bail fee yet ???

He must have a big bed to keep that lot underneath it lol

I wish the guy all the luck in the world, its good to see someone playing the big boys at their own game and beating them hands down. I have seen on youtube x goldman traders admitting placing false orders to quote " test the market conditions " as they put it, But its ok for them to do. I understand if the hound goes to the US voluntarily he wont be treated like a criminal and imprisoned as if he were extradited, not sure how much truth there is in that. Hope he gets a small fine and a slap on the wrist.

 

[rawrschach]

Apparently he complained about HFT a lot. The regulators either take on the HFT guys (who donate millions to political causes and the individuals working for the regulators are probably alumni of the firms profiting from HFT); or they silence its critics.

Nav is small time relative to Goldman but he had a reputation as one of the biggest ES traders in the world.

The Bloomberg article quotes him as telling the CME that he was showing his friend how the the system is rigged to the upside.

I see it as a signal by the US that they will not tolerate criticism and if you get too close they will chop your head off.

 

[rawrschach]

https://s3.amazonaws.com/s3.documentcloud.org/documents/2064031/appendixpages48-50.pdf

Read that.

It seems like he figured out a way to get fills out of the false liquidity shown by the HFT establishment. If their false orders suddenly started being filled a couple years I can understand why they're so annoyed now. If they proceed with the case Nav should make his software open source so everyone can use it.

 

[Splitlink]

This is like Snowden and the CIA. Someone has let the cat out of the bag and, with a bit of luck, there will be improvements made.

 

[Boilersuit]

If orders weren't MEANT to be cancelled, then.. they couldn't BE cancelled!

The phoney regulator seems to ignore this fact.

Despite the claims that the regulator is trying to protect market credibility, it looks like he's causing HUGE harm to the market with what, on the face of it, looks like an idiotic witchhunt against an innocent man.

I'm starting to wonder, just how thick/THIN the markets really are. It seems everyone OUTSIDE the US is getting big fines from the US regulator. But I know a mega fraudster in the US (absolute scumbag) and he keeps out of jail, time after time.

Just look at the SocGen fine - 10 BILLION, looks hugely political.

The US used to dominate financially until v recently. Now they know that others have pockets just as deep eg the BRICS.

My guess is that the US is nervy because someone, somewhere has worked out that something bull**** is being unraveled.

Altho I fail to see how Sarao could be even remotely connected to this.

 

[rawrschach]

Why has this come out a couple of days before the end of the statute of limitations?

My bet is that if this blows up and the focus shifts to HFT instead of Sarao none of the big boys will be indicted because it's too late.

 

[tommog]

It makes no sense why spoofing is illegal. I have been a professional prop trader for about 10 years and I love it when a spoofer comes in to the market. You can spot them a mile off and is some of the easiest money you'll ever make. The only people that fall for "spoofers" are front running algos which are more destructive to a level playing field than spoofing will ever be.

If I put in a few thousand lots of spoofed orders and the market suddenly jumps I am going to get filled on them and take the hit on the chin for trying such a tactic. If you don't like it get another job.

What about iceberg orders. I can show a 1 lot to the market when I really have 100 to buy all day long and that is well within the rules.

I wish someone that actually traded sat on one of these regulatory bodies instead of career civil servants.

As for this trader in the press, the guy is a legend and will be the pin up boy of every retail futures trader for the next decade and I take my hat off to him

 

[2be]

Have a fun reading the following
http://www.bloombergview.com/articles/2015-04-24/michael-lewis-has-questions-about-flash-crash
http://uk.reuters.com/article/2015/04/24/uk-flashcrash-trader-daytraders-idUKKBN0NF1KI20150424
http://www.bloomberg.com/news/videos/2015-04-24/sarao-didn-t-cause-flash-crash-former-boss

Does anybody know anything about the petition?
How the simple mouse stood against the mighty flash boys and their algos.
I bet someone somewhere had not gained their proverbial "cut", and is upset about it.:innocent:

 

[counter_violent]

Ex Futex trader, so I hear. Wonder if Tom (Trader Dante) knows him !!!

 

[wallstreetwarrior87]

Interesting comments from the king of old school spoofing (Paul Rotter) before it was frowned upon by the regulators:

"I have changed a lot over the years and I have stopped the really short term trading, where I was trading a couple of ticks and doing a kind of market making style. I stopped this a couple of years ago because of potential regulatory issues and also because of the evolution of all the algorithmic trading out there.

Now you have the FBI investigating algorithmic trading because what the algorithmic traders do is market manipulation, but somehow it is legal. If I put in orders and then cancelled them, I could be accused of market manipulation. But they do it in micro-seconds at the rate of 100,000’s of times a day, putting in and cancelling orders, and no one really stops them.

So for these reasons I am now doing more mid- to long-term trades in a variety of markets and I don't just concentrate on my core markets (bonds) which I was doing until I stopped short-term trading."

 

[Fugazsy]

good posts, good read.

 

[tar]

As for this trader in the press, the guy is a legend and will be the pin up boy of every retail futures trader for the next decade and I take my hat off to him

Too bad he will have sex in jail ...

 

[tar]

I am surprised by the misinformation in these posts , you cant compare a retail trader to a MM , a MM gets filled on a huge volume of his orders and his job in the market is based on : quoting and re-quoting ... etc which you call canceling orders . And search "message to fill ratio" .

If the guy is truly behind the flash crash which i doubt and i think its all nonsense , then he is a criminal and he should be in jail , alot of people lost money that day , and i can assure you that the algos and the big boys didn't ...

 

[tar]

If you cant trade profitably then don't be a criminal and cause harm to others ...

 

[itspossible]

If the guy is truly behind the flash crash which i doubt and i think its all nonsense , .

the papers need to sensationalize the story and make 1 person a scapegoat.i dont believe one word coming from the media circus

 

[tar]

the papers need to sensationalize the story and make 1 person a scapegoat.i dont believe one word coming from the media circus

IMHO He happens to be fooling around - stupidly - during the flash crash but that doesn't mean he was the cause ...

 

[DT]

Placing sell Orders and taking off the shelves is not a crime everyone knows that, they are trying to frame Dodd Frank and size related regulations....

Placing orders and taking off thats what all MM and pit players do....

erm spoofing is a crime, if he (as has been alleged) had one algo that kept his orders at least 3 ticks away then it isn't even a grey area, and the prosecution will have quite a clear case


as for him causing the flash crash... that seems a bit dubious, perhaps his activities (maybe a spoof order placed at the time) contributed to setting off a chain of events whereby a bunch of HFT algos were spooked and all selling after that change in the order book which in turn prompted other HFT algos to started selling which in turn triggers an almost instant reaction in other markets too... but that is more bad luck. Sure if he has been spoofing then he should be held to account but then again so should others. It does seem that he is being made a bit of a scapegoat.

Also if he'd done this in the bund a few years earlier (see 'the flipper'/Paul Rotter) he'd not even be prosecuted.

 

[counter_violent]

IMHO He happens to be fooling around - stupidly - during the flash crash but that doesn't mean he was the cause ...

A crash can only happen when liquidity dries up.....so if anyone is to blame, then it's the big institutions for turning off all their algo traders !!!

 

[2be]

A crash can only happen when liquidity dries up.....so if anyone is to blame, then it's the big institutions for turning off all their algo traders !!!

It is much easier to blame somebody in the UK for the mess than somebody on the door steps of US exchanges, almost keeping one foot in the door. :whistling
Even if he earned all 40 ml on that one day, it is only a drop in the ocean compared with what the HFT boys have and are still "earning"
So far HFT is legal, how therefore is it not legal to trade using the mouse to execute trades. The fact that it might have caused an avalanche is more due to HTF algos, trying to front run him, and since there is no willingness to close that lucrative activity of HFT, a timely scape goat is mostly welcomed.

 

[tar]

A crash can only happen when liquidity dries up.....so if anyone is to blame, then it's the big institutions for turning off all their algo traders !!!

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