If you ask me, spoofing is 100% utilized day in and day out by everyone out there and the SEC are blind, dumb, or paid off. Lets look at several examples that to me show how crazy it is out there. If someone has a good explanation for some of this activity, I'm all ears. All examples are taken from the NQ from just yesterday and these are 1 second bars. I realize that the spoofing that many people talk about might happen on the millisecond time frame, which the human eye might not even see, but there are lots of example on a longer time frame as well.
In this example we see a heavy bid at 6660, and as price approaches, it pulls. If you're trying to get filled at this level, why pull just as price comes down into it?
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Next example. Red arrow shows the bid only getting heavy once price takes off. Why on earth put a bid in there once price has already taken off? Ok, you say you want to get filled at that level, fine, why not then wait, cause when price gets to the blue arrow, you can get in at that level, but of course the heavy bid is gone. Who knows, maybe they got filled higher, if they really wanted to, but it makes no sense for who ever put that bid there after price has taken off, except to fuck with other algos.
Look at also the green arrow now. Bid appears when price is still many levels above it. Then, just as price gets down to this level, it pulls. It literally stops one tick shy, and then the bid is instantly cancelled.
excellent post andv ery relevant. thanks
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Same stuff happens in the ES. Red arrow, you see a heavy ask appear just as price drops lower. Some of it trades, and price goes down a couple of ticks, but the order is quickly pulled. Did this seller really want to sell or where they just trying to push price down? They had the option to sell more at that price in only a few seconds, but the order was pulled.
At the green arrow, same thing. Heavy bid appears, price shoots up in response, and quickly comes back down, but the order pulls. If the buyer wanted it, they could have gotten more. Maybe they did, without placing limit orders, who knows, but why does it pull if the order was legit?
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The point is that when you've been watching this stuff long enough, you see that the limit book doesn't really reflect what traders want to do. Isn't the most basic definition of spoofing placing order you don't intend to fill? I know that people trade for lots of different reasons, like hedging and stuff like this, but these reasons shouldn't change by the second. If your orders appear and disappear as price nears, you're clearly not looking to participate, but to fuck around.
I feel really bad for that Nav guy who went to jail for doing exactly what is still happening today on a monumental scale. The SEC is only working for the people with the deepest pockets.
