I read something on Zero Hedge about major banks (specifically Deutsche Bank) manipulating the price of silver, gold, platinum and palladium.
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After months of "smoking guns" and conspiracy theory dismissals, a Singapore-based Deutsche Bank trader (at the center of fraud allegations) finally confirmed (by admitting guilt) what many have suspected - the biggest banks in the world have conspired to rig precious metals markets.
The Deutsche Bank trader, David Liew, pleaded guilty in federal court in Chicago to conspiring to spoof gold, silver, platinum and palladium futures, according to court papers. Bloomberg notes that spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price.
Defendant LIEW placed, and conspired to place, hundreds of orders to buy or to sell precious metals futures contracts that he intended to cancel and not to execute at the time he placed the orders (the "Spoof Orders").
Defendant LIEW generated Spoof Orders manually. That is, LIEW physically clicked his computer mouse or keyboard keys to enter each Spoof Order, and physically clicked his mouse or keyboard keys to cancel that order.
A common technique employed by defendant LIEW was to place and cancel one or more Spoof Orders on one side of the prevailing market price. The intent of these Spoof Orders was to facilitate the execution of an existing Primary Order on the opposite side of the market. By placing Spoof Orders opposite the Primary Order, LIEW intended to create a false appearance of supply or demand and induce other market participants to react to this false information in order to move the market price and/or increase the available quantity at the desired price of the relevant futures contract. During the time the Spoof Order was live in the market, or shortly after it was cancelled, LIEW's Primary Order on the other side of the market would often execute at a more favorable price than was otherwise available before the Spoof Order had been placed.
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So, how does spoofing actually work? Do the traders put in a bid for a higher price and try to manipulate metals price higher and then buy a PUT because he knows it won't sustain itself ?
Or do they sell an Option and hope it pulls the price higher or lower and then cancel the option when the price moves before someone sells it?
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This is what Investopedia says, but it doesn't relate to securities.
What is 'Spoofing'
Spoofing is a type of scam where an intruder attempts to gain unauthorized access to a user's system or information by pretending to be the user. The main purpose is to trick the user into releasing sensitive information in order to gain access to one's bank account, computer system or to steal personal information, such as passwords.
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How many contracts do you think that they had to buy/sell before they were able to influence the price?
http://www.zerohedge.com/news/2017-...-fraud-conspiracy-rig-precious-metals-markets
----------
After months of "smoking guns" and conspiracy theory dismissals, a Singapore-based Deutsche Bank trader (at the center of fraud allegations) finally confirmed (by admitting guilt) what many have suspected - the biggest banks in the world have conspired to rig precious metals markets.
The Deutsche Bank trader, David Liew, pleaded guilty in federal court in Chicago to conspiring to spoof gold, silver, platinum and palladium futures, according to court papers. Bloomberg notes that spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price.
Defendant LIEW placed, and conspired to place, hundreds of orders to buy or to sell precious metals futures contracts that he intended to cancel and not to execute at the time he placed the orders (the "Spoof Orders").
Defendant LIEW generated Spoof Orders manually. That is, LIEW physically clicked his computer mouse or keyboard keys to enter each Spoof Order, and physically clicked his mouse or keyboard keys to cancel that order.
A common technique employed by defendant LIEW was to place and cancel one or more Spoof Orders on one side of the prevailing market price. The intent of these Spoof Orders was to facilitate the execution of an existing Primary Order on the opposite side of the market. By placing Spoof Orders opposite the Primary Order, LIEW intended to create a false appearance of supply or demand and induce other market participants to react to this false information in order to move the market price and/or increase the available quantity at the desired price of the relevant futures contract. During the time the Spoof Order was live in the market, or shortly after it was cancelled, LIEW's Primary Order on the other side of the market would often execute at a more favorable price than was otherwise available before the Spoof Order had been placed.
-----
So, how does spoofing actually work? Do the traders put in a bid for a higher price and try to manipulate metals price higher and then buy a PUT because he knows it won't sustain itself ?
Or do they sell an Option and hope it pulls the price higher or lower and then cancel the option when the price moves before someone sells it?
----------------
This is what Investopedia says, but it doesn't relate to securities.
What is 'Spoofing'
Spoofing is a type of scam where an intruder attempts to gain unauthorized access to a user's system or information by pretending to be the user. The main purpose is to trick the user into releasing sensitive information in order to gain access to one's bank account, computer system or to steal personal information, such as passwords.
-----------
How many contracts do you think that they had to buy/sell before they were able to influence the price?
http://www.zerohedge.com/news/2017-...-fraud-conspiracy-rig-precious-metals-markets
