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Turns out someone in the comments to that article had a better idea of what was going on: "He isn't trying to push the price with his big orders so much as get
by subnaught 11y ago
Turns out someone in the comments to that article had a better idea of what was going on:
"He isn't trying to push the price with his big orders so much as get a certain type of participant to join his level whose behavior he can exploit. He's exploiting two things about market-makers. 1. They look at book imbalance to decide where to bid and offer. By balancing out the book or skewing it one way, he incites them to join and can sweep them. 2. Once they trade contracts on one side of the market, their risk management logic creates price impact or is predictable."
http://www.bloombergview.com/articles/2015-10-21/regulators-bring-a-strange-spoofing-case#comment-2320996180 http://www.bloombergview.com/articles/2015-10-21/regulators-...
- ikeboy 11y agoThat's the government's claim, more or less. The article says that's not evident from the actual trades done: he may have simply changed his mind after the orders didn't get hit. A piece of evidence the article gives for this is that much of the filling of his second order was later, well after algos had a chance to see his cancellation. So there was no need for any spoofing anyway.