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It seems you misunderstand both derivatives as well as the Libor rigging. The price of a future absolutely can affect the price of its underlying, and the Libor
by pgwhalen 9y ago
It seems you misunderstand both derivatives as well as the Libor rigging. The price of a future absolutely can affect the price of its underlying, and the Libor rigging has nothing to do with any of this - the problem was that the value was not determined by the market, it was basically just a “vote.”
- jnordwick 9y agoI work in derivatives trading (well did, recently fx). I see you do too. Fun huh. I meant libor as in a futures price that was disconnected from anything meaningful not a direct comparison. The comparison was to how libor was easily rigged by those submitting quotes that weren't correct. Libor wasn't just a vote but a collection of informal (and incorrect) quotes. When financially settled against a manipulated number the standard ways a future affects the spot (by taking delivery) doesn't apply. Go read the proposed contacts for the future and real time BTC index. If the index is being manipulated the future doesn't stand a chance at correcting it.
- pgwhalen 9y agoAh I see what you mean, that makes sense. I took quickly jumped to assuming ignorance regarding the Libor thing. I definitely agree with the concept. This reminds me of potential VIX options manipulation. Not quite the same thing, and probably not as susceptible to manipulation, but a similar concept nonetheless: https://www.bloomberg.com/view/articles/2017-05-24/vix-trading-hoaxes-and-blockchain https://www.bloomberg.com/view/articles/2017-05-24/vix-tradi... My experience is equity options, btw.
- jnordwick 9y agoI used to run a trade of equity options against the closing cross near witching days. Cool. I'm going to hit you up on linkedin. Always good to have good tech contacts.