A trading thought experiment

[axeman]

Why? They were perfectly legal, not an error, and intentional.

peace

axeman

Quote from pspr:

Actually, Globex will bust most of your trades as the E-mini will move away from the big S&P and the cash.

 

[pspr]

Quote from axeman:

Why? They were perfectly legal, not an error, and intentional.

peace

axeman

I think they have the discretion to bust trades if they deviate a certain amount from the big S&P or the cash. It doesn't matter though, you would be in jail for attempting to manipulate the market anyway.

 

[axeman]

Funny.... isnt that what market makers and specialists
do every day?

Artificially move the market enough to hit stops and
shake people out of their position, only to let the
stock rip in the other direction moments later??


peace

axeman

Quote from pspr:


I think they have the discretion to bust trades if they deviate a certain amount from the big S&P or the cash. It doesn't matter though, you would be in jail for attempting to manipulate the market anyway.

 

[ElectricSavant]

Yes...but they have a license to steal........

Michael B.

Quote from axeman:

Funny.... isnt that what market makers and specialists
do every day?

Artificially move the market enough to hit stops and
shake people out of their position, only to let the
stock rip in the other direction moments later??


peace

axeman

 

[axeman]

Ok...back to the question.

Since this is a THOUGHT EXPERIMENT, I want to
avoid the "technicalities" such as broken trades,
illegal market manipulation, etc, etc...


In a purely THEORETICAL market place, without
any of these snags, where everyone is FREE to trade
and do whatever they want, what would the result be???

I think that clarifies what im trying to get at.
Make money, lose money, or about even???

peace

axeman

 

[axeman]

Any bets on how long it would take to get to 535
at this rate of 100 emini contracts per second??

Seconds, minutes, hours, days??? Anyone?


peace

axeman

Quote from profitseer:

shorting every second from 1070 to 535? oh man, my finger's getting tired just thinking about it.

 

[G_Morgan]

Clearly, you make money.

To recap, the scenario:

Unlimited capital.
You short until the market is halved.
You buy until infinity (no limit was given)...
The value of your first buys rises, and you get rich (on paper)... of course, you can never liquidate, else you are going to lose a lot of that value.

Ok, I know I'm cheating.

 

[axeman]

Well...actually there was a limit.
You only buy back as much as your shorted.

peace

axeman

Quote from G_Morgan:

Clearly, you make money.

To recap, the scenario:

Unlimited capital.
You short until the market is halved.
You buy until infinity (no limit was given)...
The value of your first buys rises, and you get rich (on paper)... of course, you can never liquidate, else you are going to lose a lot of that value.

Ok, I know I'm cheating.

 

[G_Morgan]

At that point, you start buying all of it back at the rate
of 100 contracts per second (same rate).

->No stated limit, although it is obvious. Hence, I said I was cheating

 

[axeman]

Ok...thats clear now. I getcha.

peace

axeman

Quote from G_Morgan:

At that point, you start buying all of it back at the rate
of 100 contracts per second (same rate).

->No stated limit, although it is obvious. Hence, I said I was cheating