There seems a lot that do it, and some that get caught.PeterLe wrote: ↑Fri Apr 03, 2020 12:56 amI thought Id post this whilst i remember
Ive been following what happened to Navinder Sarao who was considered (rightly or wrongly) to have caused the flash crash of 2010. It recen;t went to court in the US and he escaped a lengthy jail sentence.
he was a self taught trader who amassed around £90m and earned upto £90K a day from his mum and dads back bedroom!
He had a program written for him that essentially submitted many spoof bets (mhmm that sound familiar
Well there is a book due out in written and audiobook next month
Flash Crash: A Trading Savant, a Global Manhunt and the Most Mysterious Market Crash in History
Def one for the list and looking forward to reading it (oh and there is a film too soon, although with The big Short being the exception; these tend not to lend themselves too well to the big screen imo)
At 14.32 p.m. on May 6, 2010, stock markets around the world simultaneously crashed without warning, wiping out trillions of dollars and creating havoc. The incident, dubbed 'The Flash Crash', exposed the shaky foundations propping up today's hyper-fast, computer-dominated financial system.
Government hearings, academic papers and a sweeping US investigation followed but, for years, its cause remained a mystery. Then, on April 21, 2015, two dozen police officers and FBI agents descended on a shabby suburban street in Hounslow to arrest an unlikely figure: Navinder Singh Sarao, a slight, doe-eyed 36-year old second-generation British Indian who - despite never having set foot in an investment bank - had earned more than $60 million trading futures in the same bedroom he'd slept in since he was a boy.
Sarao was a genuine savant, a one-in-a-million talent for whom making money in the markets was just another computer game to perfect. But he also had a steely, stubborn side. In 2009, frustrated by what he and many others saw as the unfair advantage enjoyed by multibillion-dollar high-frequency trading firms, Sarao had built a computer system that ‘spoofed’ his rivals into trading how he wanted.
He called it ‘NavTrader’, and the US government says it contributed to the biggest crash in the history of financial markets. The Flash Crash tells the unlikely story of how a streetwise, working-class outsider from West London who lived with his parents and never had a job came to outsmart some of the richest and most sophisticated investors in the world, raking in millions of pounds until the fateful day his doomsday machine worked too well, and he stood accused of bringing the global financial system to the brink of collapse.
©2019 Liam Vaughan (P)2019 HarperCollins Publishers Limited
At what point does it translate from a genuine trading tactic to manipulation?
Is it illegal, and why?
It sounds like a bluffing tactic, that could go horribly wrong if executed poorly...so there are risks too.