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Trading with yourself?
- Thread starter kubilai
- Start date
Quote from jimrockford:
From the Securities and Exchange Act of 1934
PROHIBITION AGAINST MANIPULATION OF SECURITY PRICES
SEC. 9. ø78i¿ (a) It shall be unlawful for any person, directly
or indirectly, by the use of the mails or any means or instrumentality
of interstate commerce, or of any facility of any national
securities exchange, or for any member of a national securities
exchangeâ
(1) For the purpose of creating a false or misleading appearance
of active trading in any security registered on a national securities
exchange, or a false or misleading appearance with respect
to the market for any such security, (A) to effect any transaction
in such security which involves no change in the beneficial ownership
thereof, or (B) to enter an order or orders for the purchase of
such security with the knowledge that an order or orders of substantially
the same size, at substantially the same time, and at
substantially the same price, for the sale of any such security, has
been or will be entered by or for the same or different parties, or
(C) to enter any order or orders for the sale of any such security
with the knowledge that an order or orders of substantially the
same size, at substantially the same time, and at substantially the
same price, for the purchase of such security, has been or will be
entered by or for the same or different parties.
Rockfish...
Quoting something like the 1934 Act is pointless...
Because it's been amended and "clarified" countless times by SEC rulings over 75 years.
In the real world of the Securities Industry...
One achieves "regulatory compliance" by following the NASD Manual or the NYSE Constitition...
By consulting with your firm's NASD Examiner...
And the countless regulatory gray areas...
Are resolved by looking at years of SEC/NASD decisions in disciplinary cases...
Just like any body of case law.
Gray areas are very common.
To someone like me that was a US broker-dealer for 7 years...
The idea that the SEC would go after a retail trader...
For simply moving securities between accounts with purely administrative intent...
Is ridiculous.
Because Customers have written no NASD exams...
They cannot be expected to know the fine points of what is legal or not...
So it's the broker or Clearing Firm that would be held responsible for a Customer's unusual trading patterns.
That's why I got a letter from IB...
And IB chose to do absolutely nothing.
Seems pretty clear.Quote from jimrockford:
PROHIBITION AGAINST MANIPULATION OF SECURITY PRICES
SEC. 9. ø78i¿ (a) It shall be unlawful .....
(1) For the purpose of creating a false or misleading appearance of active trading in any security registered on a national securities exchange, or a false or misleading appearance with respect to the market for any such security, (A) to effect any transaction in such security which involves no change in the beneficial ownership thereof, or ....
Jack
Not legal. Regardless of intent it is market manipulation. The reason being your "wash" is a false print which may strigger stops and impact the market.
In slow overnight session myself and others used to buy or sell one lots into a stack where we were working a much larger order. We were quickly slapped on the wrist and told to stop.
In slow overnight session myself and others used to buy or sell one lots into a stack where we were working a much larger order. We were quickly slapped on the wrist and told to stop.
Quote from kubilai:
Say you have two accounts under your name, is it legal to have the two accounts trade with each other? I'm thinking this is a fast way to transfer positions, instead of using ACATS.
The only legal way to get that transfer done intraday is by "crossing" on the floor..or virtual floor if OTC.
Normally there MUST be a beneficial change in ownership. But a cross allows you to bypass this by creating a "print" to the tape.
Go to your broker...tell him you want to cross stock or options at the mid point of the inside mkt with your other broker. A cross is just simultaneous buying/selling.
Often when you see large prints outside the normal range of activity it is cross occurring. i.e.. avg daily vol 200k....you see a 3.5mm print go off without budging the mkt...
Voila....instant "ACAT"
Good trading to you!
Quote from DeeDeeTwo:
Rockfish...
Quoting something like the 1934 Act is pointless...
Because it's been amended and "clarified" countless times by SEC rulings over 75 years.
No. I quoted the 1934 Act, including any amendments since 1934, so that the quotation is up to date.
The SEC, furthermore, lacks authority to "amend" any act of Congress, including the 1934 act I quoted. An act of Congress is required to amend an act of Congress, except for rare exceptions when such an act might be amended or struck down by the judiciary because of constitutionality problems.
Market participants, including retail customers, are legally bound to obey the 1934 Act, in addition to any other requirements imposed by the SEC or by industry SRO's like the NYSE or NASD.
It is not a good idea to try to get away with violating securities laws, and then try to shift the blame to your broker. Remember how Martha Stewart went to prison?
It is also a good idea to keep in mind that the SEC loves to go after small fry, because they are too weak to fight back, and that the SEC tends to ignore the really big violations by the really big violators.
I realize that the 1934 Act seems to require an intent to deceive, in order to make the conduct illegal, but I still think it is a really, really bad idea to use wash trades in order to move securities between the same person's accounts.
Quote from kefsurfer:
Not legal. Regardless of intent it is market manipulation. The reason being your "wash" is a false print which may strigger stops and impact the market.
In slow overnight session myself and others used to buy or sell one lots into a stack where we were working a much larger order. We were quickly slapped on the wrist and told to stop.
I'm a member of the puretick emini futures trading room. When a call is made I'm always getting 1-2 ticks of slippage. Is this because there are over 100 guys going in market at the same time? Is there a faster way I can get my trades executed?
BK