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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 445.60-10.1%Jan 30 4:00 PM EST
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To: Snowshoe who wrote (111741)4/21/2015 10:43:09 PM
From: Snowshoe  Read Replies (1) of 219943
 
Spreadsheet and Gumption Were All U.K. Trader Needed to Rig Market
bloomberg.com

It only took a spreadsheet souped up with custom enhancements to manipulate one of the world’s biggest markets with a strategy that on some days involved trading billions of dollars’ worth of stock-futures contracts.

According to the U.S. Justice Department, London trader Navinder Singh Sarao earned $40 million from 2010 to 2014. His product of choice: CME Group Inc.’s E-mini futures on the Standard & Poor’s 500 Index, the key measure of U.S. stock prices. He traded so much, the U.S. government says, that he contributed to the flash crash of May 6, 2010, that briefly drove shares into a nosedive that erased nearly $1 trillion in value.

Sarao, according to the complaint filed in a Chicago court Tuesday, used strategies known as spoofing and layering -- putting in fake orders to drive prices in a favorable direction -- to manipulate trading on CME’s Globex market, one of the most important in the world. He would pin his manipulative quotes just above or below current prices to trick other market participants into thinking futures were poised to move. Sarao allegedly posted those orders with no intention of executing them.
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