>> It would not >> matter much anyway because many markets are very liquid
In fact you could call it a wash. (Wash trading is where a trader buys and sells a security for the express purpose of feeding misleading information to the market.) An example of the manipulations of Koch: > A coalition called “The Energy Group > <http://politicalgates.blogspot.com/2011/11/friends-of-rick-perry-mr-and-mrs-gramm_12.html>” > is organized to press the Commodity Futures Trading Commission (CFTC) to > allow oil derivatives to be traded off the NYMEX or any other regulated > exchange. Participants in the coalition include Koch, Enron, ... Koch executive David Chang > CHANG: The drop in crude oil prices from more than US$145 per barrel in July > 2008 to less than US$35 per barrel in December 2008 has presented > opportunities for companies such as ours. In the physical business, purchases > of crude oil from producers and storing offshore in tankers allow us to > benefit from the contango market where crude prices are higher for future > delivery than for prompt delivery. > For example, in 2013, the Commission found that JP Morgan violated the Anti- > Manipulation Rule by engaging in twelve strategies over a two-year period in > which it intentionally submitted bids to CAISO and MISO that falsely appeared > economic to the market software, but were intended to, and in almost all > cases did, lead CAISO and MISO to pay JP Morgan at rates far above market > prices. > Exchanges and alternative trading systems (ATS) trade the same securities. > Recent developments include the introduction of marketplaces that offer no > pre-trade transparency (“Dark Pools”), the introduction of new order types, > including those that have limited or no transparency (“Dark Orders”), the > interaction of visible and Dark Orders on the same trading platform, and the > introduction of smart order routers. > True all these changes have been subject to regulatory review. However manipulation goes on > Latency in Goldman Sachs’s US dark pool was significant enough to justify a > fine of $800k levied by FINRA in 2014 (FINRA, 2014). It paid $1.2m to clients > as compensation for losses stemming from 395,000 stale trades > > IIROC, the Canadian securities regulator, recently published research showing > that 4% of all dark pool trades in Canada occur at stale prices, documenting > high variation across venues, with the overall proportion of latency-affected > trades by value increasing over time, as well as in duration > > traders who receive a benefit by trading actively at a stale price, HFT take > 83% of the benefit, mostly at the expense of non-HFT (97%) > > HFT participants can reliably act upon such marketplace pricing > inefficiencies. ...they are able to take advantage of the opportunity within > 2.9ms on average. > Donna Y dy...@sympatico.ca > On Aug 25, 2019, at 5:04 PM, Jose Mario Quintana > <jose.mario.quint...@gmail.com> wrote: > > Let us assume, for the sake of the argument, that it has been firmly > established that, what you state, is actually the case. It would not > matter much anyway because many markets are very liquid and the difference > between the bid and ask prices are very tight and the transaction costs are > very low. Thus, again, if one perceives, for example, that a future energy > contract is underpriced (overpriced), due to manipulation, then one could > buy (sell) it and expect to sell (buy) it at a higher (lower) price later > with the expectation of generating a profit (unless one has a paranoid > belief that after one places a trade the market will be manipulated just to > hurt one's trade). > >> Best part is: only insiders know how much or how little manipulation > exists because the derivatives are exempted from regulation. > > Some derivatives are and some are not exempted. ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
