Discover Seattle!

General Category => Discover Seattle! => Topic started by: TehBorken on Apr 21 15 08:39

Title: The stock market is completely gamed....
Post by: TehBorken on Apr 21 15 08:39
More proof that the stock market is completely gamed....




Apparently the "Flash Crash (http://en.wikipedia.org/wiki/2010_Flash_Crash)" of the stock market in May 2010 was perpetrated by a futures trader in the UK (http://www.justice.gov/opa/pr/futures-trader-charged-illegally-manipulating-stock-market-contributing-may-2010-market-flash). The US Justice Department alleges that he used a "dynamic layering scheme" of large-volume sell orders to confuse other buyers, hence winning big in his futures trades.

"By allegedly placing multiple, simultaneous, large-volume sell orders at different price points—a technique known as 'layering'—Sarao created the appearance of substantial supply in the market.  As part of the scheme, Sarao allegedly modified these orders frequently so that they remained close to the market price, and typically canceled the orders without executing them.

When prices fell as a result of this activity, Sarao allegedly sold futures contracts only to buy them back at a lower price. Conversely, when the market moved back upward as the market activity ceased, Sarao allegedly bought contracts only to sell them at a higher price."