True in stocks it isn’t. And there is a measure of help as one in a round about way is supporting the growth of companies..hence workers...jobs..etc especially if an investor unless if he/she is the big short trader that drives the stock into oblivion.%% IF your trading NOT a business;
congrats VolPro,you maybe the first/few hobby traders to make money.
AS far as taking money from some one; i never look @ that way. I have a business plan /profit plan+ as far as stocks/ETFs = its not winner take all like some futures. That is unusual not to get a market order filled; some of them take to long LOL/slippage , if its semi liquid.
And WE may call that inside info , but not that the SEC would.,
How can the SEC tell if youre 'spoofing'
- Thread starter excrypto
- Start date
At least two posters here, including the OP - don’t seem to understand exactly what “spoofing” is. At least the abusive automated spoofing that the CME has been so aggressive at curtailing and which the CFTC has been issuing some rather eye watering fines over.
The abusive spoofers are injecting then canceling tens of thousands of orders (some literally hundreds of thousands) during a trading day that are designed to create a severe depth-of-market imbalance on the bid or offer side of the market. The idea is to game other traders into puking into them - and then they “flip” the order book. Their fill-to-order ratios are infinitesimally small.
It has been established by regulated trading exchanges, academics, the CFTC, and the SEC that these spoofers were a primary contributing factor to the 2010 “flash crash” (remember that date - it’s important).
There are a couple things to remember regardless where you stand on the issue: 1. “Spoofing” was explicitly outlawed in the 2010 Dodd-Frank legislation. It is illegal. Specifically, it makes it unlawful for any person to engage in “spoofing,” which is broadly defined as “bidding or offering with the intent to cancel the bid or offer before execution.” And 2. By law, exchanges are required to maintain “orderly markets”. Exchanges are also entirely within their rights to limit abusive practices and minimize distress to their ECN’s.
The CME uses sophisticated algorithms to monitor order tags - and if you’re running automation that overwhelmingly stacks one side of the order book by injecting then canceling many hundreds or even thousands of orders for every fill you get; well, you’re asking for trouble.
And it’s not just the “small automated fish” the CME is going after - at least two Investment Banks that I’m aware of have been threatened with a total ban. And for a Bank that services many hundreds of Hedge Funds - you simply cannot clear without CME. It would be a disaster for them.
The abusive spoofers are injecting then canceling tens of thousands of orders (some literally hundreds of thousands) during a trading day that are designed to create a severe depth-of-market imbalance on the bid or offer side of the market. The idea is to game other traders into puking into them - and then they “flip” the order book. Their fill-to-order ratios are infinitesimally small.
It has been established by regulated trading exchanges, academics, the CFTC, and the SEC that these spoofers were a primary contributing factor to the 2010 “flash crash” (remember that date - it’s important).
There are a couple things to remember regardless where you stand on the issue: 1. “Spoofing” was explicitly outlawed in the 2010 Dodd-Frank legislation. It is illegal. Specifically, it makes it unlawful for any person to engage in “spoofing,” which is broadly defined as “bidding or offering with the intent to cancel the bid or offer before execution.” And 2. By law, exchanges are required to maintain “orderly markets”. Exchanges are also entirely within their rights to limit abusive practices and minimize distress to their ECN’s.
The CME uses sophisticated algorithms to monitor order tags - and if you’re running automation that overwhelmingly stacks one side of the order book by injecting then canceling many hundreds or even thousands of orders for every fill you get; well, you’re asking for trouble.
And it’s not just the “small automated fish” the CME is going after - at least two Investment Banks that I’m aware of have been threatened with a total ban. And for a Bank that services many hundreds of Hedge Funds - you simply cannot clear without CME. It would be a disaster for them.
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I don't believe that for a second. Spoofing might have triggered initial sell off, but to say that they were the reason for the flash crash is insane. Designated Market Makers are supposed to be there to provide liquidity (and stability), but it seems they only do that when there is no risk to them.
It doesn’t really matter what you or I personally believe - what mattered was what the CFTC and the SEC told legislators in 2010 in response to the flash crash. Why do you think something so esoteric as “spoofing” made it into Dodd-Frank?
And please tell me who the “designated market makers” are for ES and SPY. DMM’s are in smaller, thinly traded illiquid names. Exchanges don’t hand out subsidies and freebies for their most heavily traded benchmarks.
You be
You believe CFTC and SEC are honest and above board?
Robert Morse
Sponsor
Well, I was with you on most of the comments until you hit this one. The NYSE moved from a specialist model to DMMs. There is one for every listed stock. They also make markets on many NASDAQ names too.
https://www.nyse.com/market-model
Check the regulatory portion of the exchange(s) you have a concern with. Complaints will most like start at the SRO level. You can appeal the exchange finding to the regulator and you can appeal a regulator finding to the district court. Here is a recent CME action.
- NOTICE OF SUMMARY ACTION
- #
- 16-0415-BC
- #
- Effective Date
- 14 June 2019
- Effective Date
- FILE NO.:
16-0415-BC
NON-MEMBER:
Markus Groebner
RULE VIOLATIONS:
Rule 575.A. Disruptive Practices Prohibited
No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.
FINDINGS:
On December 12, 2017, a Panel of the Board of Trade of the City of Chicago (“CBOT”) Probable Cause Committee charged Markus Groebner with violating CBOT Rule 575.A. based on allegations that on multiple occasions between August 1, 2015, and December 31, 2015, Groebner entered bids and offers on the Globex electronic trading platform during the pre-open period for December 2015 and March 2016 Wheat futures markets, which were not entered for the purpose of executing bona fide transactions. The entry and subsequent cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price.
On April 22, 2019, a Hearing Panel Chair of the CBOT Business Conduct Committee (“BCC”) entered an order finding that Groebner failed to answer the charge issued against him. In failing to answer the charge, the Hearing Panel Chair further ordered that Groebner was deemed to have admitted the charge issued and waived his right to a hearing on the merits of the charge.
Pursuant to CBOT Rule 407.C., a penalty hearing was held before a Panel of the BCC on May 23, 2019. The Panel found Groebner guilty of committing the admitted charge.
PENALTY:
Based on the record and the Panel’s findings and conclusions, the Panel ordered Groebner to pay a find in the amount of $50,000, and suspended Groebner from: (1) applying for membership at any CME Group exchange; (2) direct or indirect access and use of any trading floor, electronic trading platform or clearing platform owned or operated by any CME Group exchange; and (3) affiliation with, employment by, or have a financial or beneficial interest in a Member or broker association beginning on June 14, 2019, and continuing for three years from the date the fine is paid in full.
EFFECTIVE DATE:
June 14, 2019
It doesn’t matter what my opinion is about regulatory efficacy. I can only expend energy on what I have direct control of. What matters to me is that: 1. I personally don’t need to game the order book, and 2. Securities Attorneys are very expensive - $500 per hour and up.
Bob, I take your point - I was referring more about the regulated futures market (specifically the CME) as that is where the lions share of these CFTC compliance actions for spoofing are being referred from.
Well when markets went electronic it leveled more the playing field for the retail trader but it also opened the doors wide open for spoofing in massive ways and not just the little games of it that were played before it became known as spoofing. It still was spoofing but on a much smaller scale.