Because it bolsters their positions depending upon their level of influence. It's an ethical problem.
Disclosure of positions is hilarious because for the big players it causes the market to shift more in their favor because the smaller players chase after them.
Look at when we put in the market bottom a few months ago... One of the main reasons traders were bullish was because someone had bought 150 mil worth of spy calls... Then on the pre-EU news there was news of a 60,000 car market buy. Price action is the main influence on the movement of price... And thats normal.
But, like when warren buffet makes a big investment in some company and then it ends up on the news... Everyone comes rushing into that company and it helps shift the stock in his favor even more.
Anyone else have any thoughs on this?
Here is a quote from the book "Pit Bull."
"Eventually, they got to oil futures and I thought that this discussion
would be pretty interesting because the price of oil had
been plummeting. It was trading at $12.50 a barrel, the lowest
it had ever been since the formation of OPEC, and nobody
seemed to know why. There was speculation that the CIA might
be putting pressure on the Saudis to flood the market in order
to help our balance of payments, or maybe just to needle the
Russians, or the Iranians, or the Iraqis, or all of them; who
knew?
To talk about oil, Easton called on some porky cowboy from
Texas. To me, the guy looked like Billy Tex Bunghole. He was
wearing boots and a spangly silk shirt that was open halfway
down the front. A big gold chain hung around his neck and
attached to it was a gold medallion that dangled on his furry
chest. His porky face was beet red and he was sweating. "Seems
lak to me," he drawled, "over the nex six months, the prass of
West Texas crewed is headin' down anotha six dollars a barrel.
Ah mean to tell you boys, those wells are pumpin' lak a two-dollar
hooker on a Sahdy naht. We've got awl comin out our ass.
In six months, we ain gonna be able to give it away."
"Thank you, Tex," Bob said. "Now let's hear what's happening
in the European market." He called on a dapper little
Frenchman. This guy was thin and effete, and wearing a tailored
blue serge suit, custom-made shirt, and Hermes tie. "In
zee next five years," Pierre Le Flit crooned, "zee supply of oil
will far outstrip zee demand in I'Europe."
When Pierre finished, Helmut Weymar caught me by surprise.
"We're fortunate to have Marty Schwartz with us
tonight," he said. "Marty's a new trader with Commodities
Corp, one who's doing very well for us. Marty, what do you
think about what you just heard?"
I puffed out my chest a little. I didn't trade crude oil much,
but I decided that this would be a good chance for me to shake
things up a bit. I was the new dog at the hydrant and it was time
to lift my leg. "Helmut," I said, "I appreciate your asking me
down here tonight, but I'm something of a heretic. I don't know
what the supply and demand of oil's going to be in Europe in
the next five years and I don't know what the price of West
Texas crude's going to be in six months and, frankly, I don't
care. I'm a mark-to-market trader, all I want to know is what the
price is going to be tomorrow, and I've got to tell you, when I
posted my charts, checked my stochastics, and calculated my
ratios just before I left the office today, oil was above my moving
averages. As far as I'm concerned, oil's in a positive mode.
The Commodities Corps Semi-Annual Trader's Dinner wasn't
over until after eleven, and by the time I got home, I was too tired
to go over my charts. The next day, I was paying for it. I was constantly on the wrong side of the market; I was tired and way out
of sync. At midmorning, the phone rang. It was Harry Denny
from Shearson. "Marty," he said, "have you seen the price of oil?
It's going crazy." I punched oil up on my screens. The Dec 88's
were at $13 a barrel and climbing. Tick, $13.10. Tick, $13.15.
"Fuckin' unbelievable," I said. "We talked about oil at the
Commodities Corp dinner last night. I said it was going up, but
I was just yanking their chains."
I forgot about oil and went back to my own trades. I was
down a bundle on S&P futures. The next day, Harry called me
again. "Marty," he said, "you watching oil? Sheik Yamani must
have ordered OPEC to turn off the spigots or something. It's
heading straight up." I punched oil up on my screens again.
Tick, $14.30. Tick, $14.35.
When oil hit $15 the following day, it finally dawned on me
what was happening. It wasn't Sheik Yamani who'd driven the
price up 20 percent in three days. It was Sheik Schwartz, the
kid from New Haven, who'd done it. What I should have realized
was that if 50 percent of the pooled commodities money in
the country was sitting in the same room at the same time, a lot
of it was in oil, and most of it was short. When Sheik Schwartz
said that his charts showed oil was in a positive mode, it was
like yelling "fire" in a crowded room. Now these guys were frantically
trying to cover their positions. I felt like kicking myself."
The biggest and best traders in the country who are the most influential can really move markets by the words they say.
Disclosure of positions is hilarious because for the big players it causes the market to shift more in their favor because the smaller players chase after them.
Look at when we put in the market bottom a few months ago... One of the main reasons traders were bullish was because someone had bought 150 mil worth of spy calls... Then on the pre-EU news there was news of a 60,000 car market buy. Price action is the main influence on the movement of price... And thats normal.
But, like when warren buffet makes a big investment in some company and then it ends up on the news... Everyone comes rushing into that company and it helps shift the stock in his favor even more.
Anyone else have any thoughs on this?
Here is a quote from the book "Pit Bull."
"Eventually, they got to oil futures and I thought that this discussion
would be pretty interesting because the price of oil had
been plummeting. It was trading at $12.50 a barrel, the lowest
it had ever been since the formation of OPEC, and nobody
seemed to know why. There was speculation that the CIA might
be putting pressure on the Saudis to flood the market in order
to help our balance of payments, or maybe just to needle the
Russians, or the Iranians, or the Iraqis, or all of them; who
knew?
To talk about oil, Easton called on some porky cowboy from
Texas. To me, the guy looked like Billy Tex Bunghole. He was
wearing boots and a spangly silk shirt that was open halfway
down the front. A big gold chain hung around his neck and
attached to it was a gold medallion that dangled on his furry
chest. His porky face was beet red and he was sweating. "Seems
lak to me," he drawled, "over the nex six months, the prass of
West Texas crewed is headin' down anotha six dollars a barrel.
Ah mean to tell you boys, those wells are pumpin' lak a two-dollar
hooker on a Sahdy naht. We've got awl comin out our ass.
In six months, we ain gonna be able to give it away."
"Thank you, Tex," Bob said. "Now let's hear what's happening
in the European market." He called on a dapper little
Frenchman. This guy was thin and effete, and wearing a tailored
blue serge suit, custom-made shirt, and Hermes tie. "In
zee next five years," Pierre Le Flit crooned, "zee supply of oil
will far outstrip zee demand in I'Europe."
When Pierre finished, Helmut Weymar caught me by surprise.
"We're fortunate to have Marty Schwartz with us
tonight," he said. "Marty's a new trader with Commodities
Corp, one who's doing very well for us. Marty, what do you
think about what you just heard?"
I puffed out my chest a little. I didn't trade crude oil much,
but I decided that this would be a good chance for me to shake
things up a bit. I was the new dog at the hydrant and it was time
to lift my leg. "Helmut," I said, "I appreciate your asking me
down here tonight, but I'm something of a heretic. I don't know
what the supply and demand of oil's going to be in Europe in
the next five years and I don't know what the price of West
Texas crude's going to be in six months and, frankly, I don't
care. I'm a mark-to-market trader, all I want to know is what the
price is going to be tomorrow, and I've got to tell you, when I
posted my charts, checked my stochastics, and calculated my
ratios just before I left the office today, oil was above my moving
averages. As far as I'm concerned, oil's in a positive mode.
The Commodities Corps Semi-Annual Trader's Dinner wasn't
over until after eleven, and by the time I got home, I was too tired
to go over my charts. The next day, I was paying for it. I was constantly on the wrong side of the market; I was tired and way out
of sync. At midmorning, the phone rang. It was Harry Denny
from Shearson. "Marty," he said, "have you seen the price of oil?
It's going crazy." I punched oil up on my screens. The Dec 88's
were at $13 a barrel and climbing. Tick, $13.10. Tick, $13.15.
"Fuckin' unbelievable," I said. "We talked about oil at the
Commodities Corp dinner last night. I said it was going up, but
I was just yanking their chains."
I forgot about oil and went back to my own trades. I was
down a bundle on S&P futures. The next day, Harry called me
again. "Marty," he said, "you watching oil? Sheik Yamani must
have ordered OPEC to turn off the spigots or something. It's
heading straight up." I punched oil up on my screens again.
Tick, $14.30. Tick, $14.35.
When oil hit $15 the following day, it finally dawned on me
what was happening. It wasn't Sheik Yamani who'd driven the
price up 20 percent in three days. It was Sheik Schwartz, the
kid from New Haven, who'd done it. What I should have realized
was that if 50 percent of the pooled commodities money in
the country was sitting in the same room at the same time, a lot
of it was in oil, and most of it was short. When Sheik Schwartz
said that his charts showed oil was in a positive mode, it was
like yelling "fire" in a crowded room. Now these guys were frantically
trying to cover their positions. I felt like kicking myself."
The biggest and best traders in the country who are the most influential can really move markets by the words they say.
