Tape Painting

[Eleanor]

How hard is it for 2 people to collude in painting the tape, buying and selling to each other out of separate accounts, maybe from different countries even? I often see price actions that can only make sense if prints are "faked" or offsetting.

 

[Benny]

paint taping like that is done by large hedge funds throwing 10 million or so

they create impression of fall or rise in hope to set a trend

once trend is accepted by the masses, they cash in and end the trend

so yes they do it all the time

and to quote Cramer who admits to all this when he managed a fund

"the SEC doesn't understand it"

 

[spindr0]

Back in the 90's I knew some brokers who worked at smaller firms that pushed their small cap IPOs which usually had fairly larger spreads. At 4 PM on the last day of the month (or later in the after market if another trade followed at the bid) they'd buy a 100 shares so that the monthly statements would reflect the higher price of the ask. Ahhh, the good old days of Painting the Tape in order to fool the client

 

[Bluegar3]

Quote from spindr0:

Back in the 90's I knew some brokers who worked at smaller firms that pushed their small cap IPOs which usually had fairly larger spreads. At 4 PM on the last day of the month (or later in the after market if another trade followed at the bid) they'd buy a 100 shares so that the monthly statements would reflect the higher price of the ask. Ahhh, the good old days of Painting the Tape in order to fool the client

lol

 

[El Guapo]

Quote from Eleanor:

How hard is it for 2 people to collude in painting the tape, buying and selling to each other out of separate accounts, maybe from different countries even? I often see price actions that can only make sense if prints are "faked" or offsetting.

-Not very hard at all.
-No need to be in different countries at all, heck, just another account will do, but the more the better.
-Occurs more often than you can imagine...at every level in the industry, guy in basement in prague to server farm at jpm.
-Now its mostly done with "bots", that is, high speed rapid fire executions that are "programmed" and fed into the market under precise control, often timed split multi-block "weight" that is highly coordinated and orchestrated.
In other words, don't try this at home...instead just watch and try to participate with.