High Frequency trader fined for "market abuse"

[Grandluxe]

By Maria LaMagna
July 22, 2013, 9:01 a.m. EDT
High-frequency oil trader fined for market abuse

NEW YORK (MarketWatch) -- The U.K. Financial Conduct Authority fined U.S.-based oil trader Michael Coscia $903,176 for deliberately manipulating commodities markets, marking the first time the FCA has taken action against a high-frequency trader. Coscia used a program he designed to engage in "layering," an abusive trading strategy, between Sept. 6 and Oct. 18, 2011. He placed thousands of false orders for Brent Crude, Gas Oil and Western Texas Intermediate futures from the U.S. on the ICE Futures Europe exchange in the U.K., and made a profit of $279,920 during the six-week period, at the expense of other market participants.

http://www.marketwatch.com/story/high-frequency-oil-trader-fined-for-market-abuse-2013-07-22

 

[emg]

HFT will blow small traders away.

 

[JamesL]

more (CFTC version):

http://money.cnn.com/2013/07/22/investing/high-speed-trading-fine/index.html?hpt=hp_t3

The total financial penalty includes a CFTC penalty of $1.4 million, a CME fine of $800,000, along with a fine of about $900,000 imposed by the U.K. Financial Conduct Authority for Coscia's deliberate manipulation of Brent crude, gas oil and West Texas Intermediate futures contracts on the ICE.

 

[Ned Stark]

Depends what time frame you operate on. I haven't had any issues trading the SPY. Can't speak for individual equities.

Quote from emg:

HFT will blow small traders away.

 

[Satan's Helper]

A Pawn! Any Questions?

 

[JesseJamesFinn]

We can live with those computers, they are after the big orders from those Elephants and Whales. HFTS have made me alter my style from trading in seconds to the "five minute to overnight style" unless it's one of those crazy Chinese Reverse IPOs the Shorts will gap up and clobber back down. CLNT is the perfect example of a stock the HFTS use and then we get those professionals Shorting it into the dirt.


The Exchanges are getting really mad, I know it's fact some Market Makers who service those HFTS guys will shut off order-flow if they even think it going down. The most hypocritical thing is someone like SPLK (Goldman's NYSE Specialist Firm) are notorious for sniffing out giant orders and jumping in the way of giant orders. How does a person front-run via ARCA or INCA (Nasdaq) if we truly have direct-access? You see the same thing, you post your bid or ask and those HFTS will jump one-penny in your way. Notice they if you try their method, they will hit you with a 21 share fill!

 

[bone]

Quote from Ned Stark:

Depends what time frame you operate on.

Smartest post on this topic yet. Brilliant.

If you are scalping manually ( using a mouse and market DOM ladder windows, for example ) at higher frequencies you are going to get flipped and gamed. In just about any market quite frankly. I think this has been thoroughly demonstrated over the past few years and the evidence is overwhelming based upon all the pissing and moaning coming from scalpers here on ET.