Uk Trader Blamed For Flash Crash

[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 !!!

The one to blame is the exchanges for not having a decent circuit breaker to kick-in in such situations ...

 

[Pat Riley]

One way round this type a problem would be to have just one physical exchange. No electronic communications. No external links. No windows, doors anything like that. Just a letter box through which sealed bids are popped. And a few days later a letter from the exchange telling you whether your bid has been successful or not.

 

[tar]

One way round this type a problem would be to have just one physical exchange. No electronic communications. No external links. No windows, doors anything like that. Just a letter box through which sealed bids are popped. And a few days later a letter from the exchange telling you whether your bid has been successful or not.

 

[rawrschach]

The only reason he was spoofing is that most of the depth in the market is false and he wouldn't get fills. Spoofing tricked the dumb HFTs to 'front run' into his genuine order so he got a fill.

He also says that he was being front run with small orders, i.e. someone knew when where his orders were. We know the exchanges have been selling preferential access to the market and allowing the HFT boys to cancel orders before they are executed, when they should have been executed. What other information have they been selling?

 

[kalott]

One way round this type a problem would be to have just one physical exchange. No electronic communications. No external links. No windows, doors anything like that. Just a letter box through which sealed bids are popped. And a few days later a letter from the exchange telling you whether your bid has been successful or not.

"“The more sophisticated market makers -- and Goldman is one of them -- spend significant amounts of money developing software that’s extremely fast and can analyze different execution strategies so they can be the first one to make a decision,” Tabb said.

Someone could use the code “to implement the same strategies and maybe on certain stocks they can be faster and, in effect, take away money that would normally be Goldman’s,”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axYw_ykTBokE

 

[Pat Riley]

The only reason he was spoofing is that most of the depth in the market is false and he wouldn't get fills. Spoofing tricked the dumb HFTs to 'front run' into his genuine order so he got a fill.

He also says that he was being front run with small orders, i.e. someone knew when where his orders were. We know the exchanges have been selling preferential access to the market and allowing the HFT boys to cancel orders before they are executed, when they should have been executed. What other information have they been selling?

The majority of HFT activity is to front run transactions not orders, that is, orders that are in the process of being transacted, not posted limits. They're far from dumb.

What other information do they sell? LOL. What have ya got?

 

[Philly_UK]

The truth about this guy is that he made a killing making about $13m in one day on an overnight trade and that elevated him to a different level. Day trading and spoofing did not make him rich but just this one shot.

Now he will be a frequent visitor to courts of law for the next 2-3 years, eventually will be proved not guilty of rougue trading but will still lose much of his fortune due to sanctions for his tax evasion. That's the most probable scenario.

 

[wallstreetwarrior87]

The truth about this guy is that he made a killing making about $13m in one day on an overnight trade and that elevated him to a different level. Day trading and spoofing did not make him rich but just this one shot.

Now he will be a frequent visitor to courts of law for the next 2-3 years, eventually will be proved not guilty of rougue trading but will still lose much of his fortune due to sanctions for his tax evasion. That's the most probable scenario.

Exactly, this must be the case! Think about it logically, he is supposed to have been spoofing on the ASK, 600 lots and at .25 levels on ES. The idea is that he switches to the bid (1 level below as an estimate) as the HFT transact short, then when the order is met he then goes ASK to off-load

So, are you telling me (the press etc) he had chance to do this on the day of the flash crash - get real. More likely he just bought what he could after price settled back down - if he indeed did so?.

No one has stated he made money by being short the market! (unless I have missed this evidence).

What the investigators need to really do is find out why all bids we pulled or severely depleted. Would be great if anyone had real screen footage on DOM etc on the day of the flash crash.

Again, logically it makes more sense that this was caused by spoofing the BID at vulnerable times which shows us virtually all these stories are utter BS.

There are so many private traders that have lost their accounts trying to spoof, especially in the wrong markets, then the big dog say thanks ill have that. Next thing the spoofer is forced to dump what he cant really afford, so don't play cat and mouse.

Think about it- $400 day margin on a $50,000 account- lets have a go at 100+ contracts 2 pts above current ask in a lighter market - it happens all the time, simply watch DOM, then watch to see what happens when the big dog sweeps!

This happened to Paul Rotter in the past, as there are bigger players than him!

In fact all of this links nicely into a thread recently about manipulation, MM, pivots, HFT which Im sure many have read.

1. Guilty of spoofing? Most likely.
2. Guilty of causing the crash - come on