Paul Rotter and the Order book

Probably nothing.......I trade a very good portion of the volume in some lesser liquid markets and I suppose and dont doubt that guys can literally be trading with themselves. Thats electronic markets for ya......NO TRANSPARENCY!!! Open Outcry is the only way to get a good transparent market.....looking the guy face to face when you make a trade and being able to see all the participants in one arena so nobody is fooling anybody!

Just my 2 cents
 
First of all, it is illegal on most exchanges (including Eurex) for traders to cross their own orders. Brokers are allowed to do it to fill customer orders so long as a certain protocol (time lapse) is followed.

If you think someone is crossing orders - call the exchange's help desk. Tell them the price, time and contract and they will verify the counterparties for you over the phone while you wait. Even if you weren't part of the trade, they will verify that the trade was legit. I have gotten a few people in trouble now and then, especially in thin markets and off-hours.

Secondly, 'ghost' or 'phantom' orders are subject to an exchange's order to fill ratio rules for messaging - all electronic exchanges have them. In other words, a trader is penalized and fined if the number of cancel order and replace order messages exceed the actual fill order messages by a published percentage, or 'ratio'.

Thirdly, anybody that thinks open outcry is more transparent than electronic trading can take another bong hit. Not so by a long shot. Been there, done that.

A far as Paul Rotter goes, I love the guy. Made money off him. If you think he's not fair, then he must be mis-priced. Watch the other Eurex products, the Liffe products, and the European cash market if you can get the quotes. Hit him or lift him if you think he's wrong.

If you know how to properly spread trade, then Paul Rotter shouldn't bother you in the least. Make money off him.
 
Quote from bone:

First of all, it is illegal on most exchanges (including Eurex) for traders to cross their own orders. Brokers are allowed to do it to fill customer orders so long as a certain protocol (time lapse) is followed.

If you think someone is crossing orders - call the exchange's help desk. Tell them the price, time and contract and they will verify the counterparties for you over the phone while you wait. Even if you weren't part of the trade, they will verify that the trade was legit. I have gotten a few people in trouble now and then, especially in thin markets and off-hours.

Secondly, 'ghost' or 'phantom' orders are subject to an exchange's order to fill ratio rules for messaging - all electronic exchanges have them. In other words, a trader is penalized and fined if the number of cancel order and replace order messages exceed the actual fill order messages by a published percentage, or 'ratio'.

Thirdly, anybody that thinks open outcry is more transparent than electronic trading can take another bong hit. Not so by a long shot. Been there, done that.

A far as Paul Rotter goes, I love the guy. Made money off him. If you think he's not fair, then he must be mis-priced. Watch the other Eurex products, the Liffe products, and the European cash market if you can get the quotes. Hit him or lift him if you think he's wrong.

If you know how to properly spread trade, then Paul Rotter shouldn't bother you in the least. Make money off him.
More...

I appreciate the feedback; however, I'm still bewildered how Paul Rotter is manipulating the markets, even thin markets. Does he place simultaneous buy & sell orders of the same underlying asset in large quantities with the objective of moving that specific market in a particular direction. Once one of the orders (either buy or sell) is filled, he then cancels the opposing order. He would ride the filled order for a few ticks, then close the position and repeat the process. Does this summarize what he's doing??? Is this what is meant by "crossing your oders"?

How would you make money off such a strategy, assuming my description is correct? I guess, similar to the Level II order books, one would try to "ride the wave" for a few ticks the moment the large order is filled...

thanks,

Walt
 
Quote from jones247:

I appreciate the feedback; however, I'm still bewildered how Paul Rotter is manipulating the markets, even thin markets. Does he place simultaneous buy & sell orders of the same underlying asset in large quantities with the objective of moving that specific market in a particular direction. Once one of the orders (either buy or sell) is filled, he then cancels the opposing order. He would ride the filled order for a few ticks, then close the position and repeat the process. Does this summarize what he's doing??? Is this what is meant by "crossing your oders"?

How would you make money off such a strategy, assuming my description is correct? I guess, similar to the Level II order books, one would try to "ride the wave" for a few ticks the moment the large order is filled...

thanks,

Walt
More...

I think it is like this.

He puts a big Buy order. The locals start moving the market towards the big offer. They think if I sell few ticks above the offer and the market drops I am granted that it will not drop more then few ticks as the big offer is sitting there.

If the market moves up they will ride it for few more ticks and sell for profit.

The problem is that he removes the big offer and the locals are now exposed to much bigger potential loss. They have to bail out and the price moves even lower. Rotter rides this.

Then he puts a big sell offer above the price. He flips. And repeats.

I am not sure this works anymore. The algos are smarter than this and there are many more bluffs now than ever.
 
Quote from ASusilovic:

So he´s flying in from Honkong to Zug, Switzerland from time to time ?...:confused:
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first more than himself works at rotters invest its not a one man team so he doesnt have to be there 24/7
second it can be ran without him phsyically having to be sitting there in the office, like remote trading you can work for a company but trade from your own home where ever you like
 
cross trading is a fact.

anyone who does not believe it goes on is an idiot.

forget rotter he is no threat in todays new modern market.

algos based companies ( rsj and renaissance ) are crossing trades to create the impression of prices trading all the time.

the reason they can do this is because of huge transaction cost discounts.

i know the rules say you cant trade with yourself but i think you will find the rules dont apply to them.

they probably have some bullshit market making agreement on one product which exempts them from the rules.

NO ONE CAN CROSS TRADES WITH THEMSELVES.

WHAT NAIVE PRICK SAID THAT
 
If you are are big enough to have a brokers license you can legally cross trade because you are trading multiple clients funds. If you happen to cross trade yourself, who is going to stop you.

Certainly not the exchange.

Imagine if your broker rang you and said "Sorry we can't close your position as we have a client on the other side of the order book".

Runningbear
 
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