Flash Crash Trader

[cmuddle]

Has anyone seen this video ? It got my attention, like in a movie.

https://www.youtube.com/watch?v=_ZDEWVJan0s

I have some questions about it and would love to hear your comments just as fun.

If one guy could be the reason for the crash. How screwed is or was the system?
They say he just turned off his computer, maybe lost internet connection and that triggered it.
Why his orders were not seen as suspicious in the first place?

If he would stop after let's say 20m, would he get away with it?

Why the FBI can arrest someone in UK? He should have moved to Russia. Maybe now he can and and do it again.

At the end they let him go? He was the reason for millions of people losing jobs maybe life, businesses close, economic disasters.

Cheers

[Euler]

That caught my attention as well. I've scheduled a tweet at the weekend on it.

I thought it was a liberal use of the rules to pin market manipulation on a trader from his bedroom in the UK, but it seems OK to let HFT firms use all manner of tricks to disenfranchise people from a better price.

The book is a really good read if you haven't looked at that yet.

[LeTiss]

Thanks for posting. What a brilliant, fascinating watch

I'd love to know who's actually enjoying his millions!!

[Trader Pat]

Shame this guy wasn't from a country with a non-extradition treaty.

Would love the idea of him sitting in Paris giving the finger to the US government

[jimibt]

i read this book earlier in the year, it's an interesting read. one thing i did pick up from his approach was the pulling of orders right on the cusp. inspired by this, i harboured a notion that i could create a similar spoofing automation rule. let's just say, failure knows no limits

[LeTiss]

i read this book earlier in the year, it's an interesting read. one thing i did pick up from his approach was the pulling of orders right on the cusp. inspired by this, i harboured a notion that i could create a similar spoofing automation rule. let's just say, failure knows no limits

There is an awful lot of manipulation though - it goes hand in hand with an increase of automated bots.

Many people script their automation rules to include WOM - it's the easiest thing to manipulate and start triggering those bots

[cmuddle]

That caught my attention as well. I've scheduled a tweet at the weekend on it.

I thought it was a liberal use of the rules to pin market manipulation on a trader from his bedroom in the UK, but it seems OK to let HFT firms use all manner of tricks to disenfranchise people from a better price.

The book is a really good read if you haven't looked at that yet.

Yes those HFT firms have wars against each other, who has the quickest and smartest bot with big money, big heads invested, and this guy just had a home made system. Maybe they have ways to hide themselves. Here they found the whipping boy and lucky he was to get away without landing in a US prison for 40 years.

What is the book? Would love to have a browse.

[jimibt]

you can get it on amazon: https://www.amazon.co.uk/Flash-Crash-Li ... 0008270392

i opted for the kindle version...

[MAGTRADEUK]

I worked in the interest rate futures area, only a small firm based out in the countryside (uk) we had many bots written in python I beleive these were let loose with the sole purpose to eihter win a tic or break even, sometimes a loss, but they did genereate a whole load of volume, which made money from the exhcange I believe and we were only a smaller outfit doing this. You would on some days get a massive spike / bot / trade across all the futures contracts over the 2 or 3 year spectrum. If you want to see volumes Short term interest rate futures on the Gilt are when things are moving you see the numbers fly.