Rogue trader cost MF Global $142M

rumor is he meant to put a 5000 lot sell limit order and pushed the mkt button.. the computer of course did what he said .. and moved the price where it needed to go to fill his order.. might not have been to bad if would hae used a limit. This is what caused the huge rise in wheat in 4 minutes and killed his previous positions and then gave him the worst slippage in history
 
Quote from nolajy:

rumor is he meant to put a 5000 lot sell limit order and pushed the mkt button.. the computer of course did what he said .. and moved the price where it needed to go to fill his order.. might not have been to bad if would hae used a limit. This is what caused the huge rise in wheat in 4 minutes and killed his previous positions and then gave him the worst slippage in history
More...

I've done that before...very easy to do. Not to this scale of course but I can relate to that happening. That's a pretty careless error though with such a huge order if true. Wow this guy must have really been on tilt or something. Is it any wonder that all this rouge trader business usually happens after hours?
 
Quote from nolajy:

rumor is he meant to put a 5000 lot sell limit order and pushed the mkt button.. the computer of course did what he said .. and moved the price where it needed to go to fill his order.. might not have been to bad if would hae used a limit. This is what caused the huge rise in wheat in 4 minutes and killed his previous positions and then gave him the worst slippage in history
More...
Real pros ALWAYS use limit orders.

Financial institutions will immediately fire traders who use market orders (at least some funds I personally know).

If he was trading after-hours, it's incredible he didn't used limit orders.
 
Quote from crgarcia:


If he was trading after-hours, it's incredible he didn't used limit orders.
More...

What's incredible is that the MF software allowed him to place an order for a size and value the exceeded his credit and margin limits.
 
Quote from nolajy:

rumor is he meant to put a 5000 lot sell limit order and pushed the mkt button.. the computer of course did what he said .. and moved the price where it needed to go to fill his order.. might not have been to bad if would hae used a limit. This is what caused the huge rise in wheat in 4 minutes and killed his previous positions and then gave him the worst slippage in history
More...

5000? trying to be a bigshot i guess. should have used the pit
 
Quote from alterego:

What's incredible is that the MF software allowed him to place an order for a size and value the exceeded his credit and margin limits.
More...
Have heard this rumors, if this is true,

MF IS IN REALLY HOT WATER.

Having losses because of bad trading ideas is one thing, that happens from time to time.

But violating exchange (CME and globex) maintenance margin regulations is a serious crime, which can be prosecuted by law.
 
Quote from nolajy:

then gave him the worst slippage in history
More...

Agree. That's what I call slippage:D .

The guy must have been something like 30m$ in the hole just after pressing... Imagine his face.
 
Quote from crgarcia:

Have heard this rumors, if this is true,

MF IS IN REALLY HOT WATER.

Having losses because of bad trading ideas is one thing, that happens from time to time.

But violating exchange (CME and globex) maintenance margin regulations is a serious crime, which can be prosecuted by law.
More...

From what I read they're a pretty big player on several exchanges, and I don't think the Cme and others would want to make enemies with such a big fish...but that's just my opinion.
 
Quote from 9999:

From what I read they're a pretty big player on several exchanges, and I don't think the Cme and others would want to make enemies with such a big fish...but that's just my opinion.
More...
Laws are laws. If the CME doesn't act then they would be covering a violation, another crime.

What is most possible is that the CME gives them a fine, as small as legally possible, and out of the limelight.
 
You must log in or register to reply here.
Back
Top