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I'm not the OP to your question, but I observe what you are asking about each day. Here are the steps that can facilitate your example. If you are imagining sto

I'm not the OP to your question, but I observe what you are asking about each day. Here are the steps that can facilitate your example. If you are imagining stocks(instead of futures), replace the word "contract" with the word "share" in the example below. 1) The last trade price is $9950 2) Alice calls Bob, confirming she wants to close 500k long contracts by selling them to Bob 3) Bob bids up the price to $9999 4) Alice says "Ok Bob, let's go", and offers the maximum limit offer quantity at $10,000. This maximum varies by instrument(example 5000) 5) Bob bids 5000 at $10,000, consuming all of Alice's offers 6) This process repeats(very, very quickly) until 500k has been exchanged, or until another participant with size starts knocking out Alice's offers. Edit: When you see this behavior on the volume profile, it looks like a long horizontal bar that doesn't belong. When you see it live as it happens, it's pretty scary if you have a position open. That's when you realize that you are a rubber life raft, and there are 2 gargantuan oil tankers colliding in the space you occupy. The other way these happen(in futures at least) are called "upstairs" deals. It's when you want to exchange a quantity of contracts large enough to disturb the market, and the exchange will facilitate the trade to avoid Bob or Alice(accidentally) knocking the market several ticks. I don't know how crypto currencies could have a similar scenario for those deals, but since CME is involved with BTC futures, it might be possible. Source: me, active futures trader in NQ/ZB/CL land.

fjsolwmv 9y ago
How does Bob raise the price $49 without actual paying a lot of people and creating a real new price? Or is that the entry price of the scam? And the profits come from everyone else willing to buy at 10k (instead of 9950) because they are placing market orders and don't know what the real price is? Seems like this "scam" is just taking money from people who have no idea what price they want, which gets us back to what investors think they are entitled to 8% /yr for purely passive investments backed by no loan contract.
- module0000 9y ago
  No one is really getting scammed in the example. Bob buys whatever liquidity is available between 9950-10000. Keep in mind, Bob's goal is to buy at 10k. If he is able to get 100-200 of those contracts on the way up to 10k, he's buying at a lower price than he intended, which is a great deal for Bob.

fjsolwmv 9y ago

How does Bob raise the price $49 without actual paying a lot of people and creating a real new price? Or is that the entry price of the scam? And the profits come from everyone else willing to buy at 10k (instead of 9950) because they are placing market orders and don't know what the real price is? Seems like this "scam" is just taking money from people who have no idea what price they want, which gets us back to what investors think they are entitled to 8% /yr for purely passive investments backed by no loan contract.

module0000 9y ago
No one is really getting scammed in the example. Bob buys whatever liquidity is available between 9950-10000. Keep in mind, Bob's goal is to buy at 10k. If he is able to get 100-200 of those contracts on the way up to 10k, he's buying at a lower price than he intended, which is a great deal for Bob.