Traders beware island scam

Originally posted by chasinfla
Capitalizing on the clerical mistakes of others might seem sporting and, in a perverse way, fair, but it's not. In the long run it's bad business. It certainly doesn't require any talent and truly contributes nothing. Traders who think this is cool are probably the same ones who say, 'ethics doesn't matter in trading.'

They forget that the major trades are done on a mere exchange of words and that, absent the ethics of those players, the sporting little minnows would have to look to other markets to 'rule.'
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I disagree; capitalizing on mistakes is what we do.

If I sell a market that is tanking, and someone else buys it from me, and it continues to go down; he made a mistake that I capitalized on.
 
Originally posted by Lobster


I disagree. You can't blame traders for taking advantage of a clearly erroneous system. If it were clear that all trades that happen exactly $1 away from the market are clerical mistakes, Island would have the duty to cancel all such orders before they execute. If every convicted serial killer got a one day vacation every year and the government gave her access to automatic weapons and ammunition for the duration of that day, would you blame only the killer for the resulting blood bath?
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"Blame" isn't the issue. I am responsible for the way I do business.

A keyboard error is a clerical mistake. Perhaps I should have used that term instead.

The final point really doesn't apply, I think.
 
Originally posted by chasinfla
Capitalizing on the clerical mistakes of others might seem sporting and, in a perverse way, fair, but it's not. In the long run it's bad business. It certainly doesn't require any talent and truly contributes nothing. Traders who think this is cool are probably the same ones who say, 'ethics doesn't matter in trading.'

They forget that the major trades are done on a mere exchange of words and that, absent the ethics of those players, the sporting little minnows would have to look to other markets to 'rule.'
More...

Jeez, isn't that how we picked of market makers back in the early days of SOES? Nobody thought that was unethical but the Market Makers.

Modern electronic daytrading was made popular by the "SOES Bandits" that used better software than the brokerage firms. Was that unethical too?
 
Originally posted by metooxx


I disagree; capitalizing on mistakes is what we do.

If I sell a market that is tanking, and someone else buys it from me, and it continues to go down; he made a mistake that I capitalized on.
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He has a different opinion of the market than you do. That is not a clerical error. An error in judgment perhaps, but that is a whole different ball game. Errors in judgment and their corrections are one way that traders get paid.
 
Originally posted by JWKirkland


Jeez, isn't that how we picked of market makers back in the early days of SOES? Nobody thought that was unethical but the Market Makers.

Modern electronic daytrading was made popular by the "SOES Bandits" that used better software than the brokerage firms. Was that unethical too?
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apples and oranges.

Market makers were (and perhaps are) defrauding people by failing to live up to their titles. SOES trading was born as a free market solution to this abuse.
 
Originally posted by chasinfla


"Blame" isn't the issue. I am responsible for the way I do business.

A keyboard error is a clerical mistake. Perhaps I should have used that term instead.

The final point really doesn't apply, I think.
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In our shop we do thousands of trades a day; every day we probably have ten to twenty entry errors that someone picks us off on; it is part of the business.

We make a business of picking off MMs; and sometimes they pick us off ...
 
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