They simply price fix to capture profit from purchased options

V

VanishingMediator

Whenever a large lot of option contracts is purchased they simply set the price to devalue that lot of options as long as it doesn't bring another lot into the money.

They are colluding to fix the prices by disappearing large amounts of market liquidity in between order book reports and agreeing with one another not to take advantage of the gaps.

These people need to be brought to justice for their crimes.

Every generation there is a cadre of wall street goons trying to cheat the market in some new way, and they always end up with anal rapage in prison. If anyone needs help understanding how this generation is algorithmically fixing the derivative markets, they need only ask. It's time for the chickens to come home to roost.
 
VanishingMediator said:
Whenever a large lot of option contracts is purchased they simply set the price to devalue that lot of options as long as it doesn't bring another lot into the money.

They are colluding to fix the prices by disappearing large amounts of market liquidity in between order book reports and agreeing with one another not to take advantage of the gaps.

These people need to be brought to justice for their crimes.

Every generation there is a cadre of wall street goons trying to cheat the market in some new way, and they always end up with anal rapage in prison. If anyone needs help understanding how this generation is algorithmically fixing the derivative markets, they need only ask. It's time for the chickens to come home to roost.
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Holy cow anal rapage ?? That sounds awful. I trade options and I have no clue how they would go about fixing the price without creating an arb opportunity on the other side. Since the market makers are matching up prices to even out their book, who is doing this fixing? Are you saying that the large institutional players are working together to fix the cost and then drop the price? Wouldn't that mean we could just sell options against large purchases and clean up? I would love to learn how to cheat the market (minus the anal rapage).
 
What I am talking about is basically this. There is someone with most of the clout (or several someones working together using game theory algorithms) who makes the market. Say there are an equal number of shares traded in each direction. All they have to do is delete half of the the high frequency quotes on one side and the price moves. Then they can control the derivative markets.

To calculate the price they want, they simply figure out how much they have to stand or gain total on all options they sold. If there is more than one they can still show some cooperation while looking out for themselves if the options bought/sold are spread out between them.
 
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