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People did say things like you could have made a fortune shorting stock by tweeting something insane from Elon Musks account. I don't buy that as necessarily be

by imgabe 6y ago

People did say things like you could have made a fortune shorting stock by tweeting something insane from Elon Musks account. I don't buy that as necessarily better than a Bitcoin account. Stock transactions are heavily regulated and monitored. You'd leave a pretty large paper trail of any stock manipulation you hoped to profit from. Of course Bitcoin is highly traceable as well, so maybe the lesson is hacking into high-profile Twitter accounts just isn't as profitable as you'd hope?

woutr_be 6y ago
If they knew up front they would be doing this, they could’ve shorted Tesla in smaller positions, over multiple accounts. There’s tons of people shorting Tesla, would it really be traceable to any of those?
- vkou 6y ago
  Yes, because the SEC isn't stupid, and would trawl through the data, until they found: * A set of freshly opened accounts. * That only shorted a single stock. * Right before a major hack. * That cashed out all at once. * That never traded again. And then they'd start calling the owners of those accounts, and asking questions. Most of those accounts would be legitimate traders, but that's fine - there's not that many accounts that satisfy four of those five criteria. A few sql queries can narrow it down to the point that basic detective work can solve the rest. The problem with playing stupid games on the stock market is that there's a very clear paper trail that will link you, as a human being, to the money that you're hoping to make. At least with bitcoin, you can theoretically isolate yourself from the source of the funds, through tumblers, transferring money in and out of shady exchanges, etc. This is also exactly how the SEC catches insider-traders. By analyzing the flow of trades, and following up on suspicious ones. If the first and only trade you've ever done in your life is a $200,000 short[1] on your employer twenty minutes before a disastrous earnings, you might soon be talking to a very nicely dressed man who would love to get another conviction under his belt. [1] If you think you're playing 34-d chess, and have done a bunch of other options trades surrounding it, to disguise it, you're just as likely to piss away all of your money before you even get a chance to insider-trade. That's the beauty of options - they will part a fool from their money before they can spit.
  - jessaustin 6y ago
    It would be nice if SEC were this dogged in its pursuit of actual insider trading.
    - arthurcolle 6y ago
      Haha, that's a good one.
    - vkou 6y ago
      It is. Insider trading is one of the few things it is really good at prosecuting - mostly because it's dead-easy to identify, easy to prove, often performed by idiots, and has a lot of incredibly-well established law surrounding it that makes turning piles of evidence into jail time easy. None of these reasons hold for other financial crimes, which is why there are so few bankers and executives going to jail for everything that's not insider trading.
      - kortilla 6y ago
        Providing lots of examples of prosecutions does nothing to prove they catch even the majority of insider trades because there is no ground truth to work with here. Maybe the SEC is just good at catching people who don’t think through the paper trail.
      - jessaustin 6y ago
        Most "insider trading" is done by senior executives. As you observe, only non-connected "idiots" are ever prosecuted for insider trading. This "crime" is merely a way for corporate insiders to enforce penalties against those who defect from their conspiracy against the investing public. Non-insiders who trade on "inside" information release that information to the public, to the public's benefit, before the actual insiders are ready to profit at the public's expense.
dkersten 6y ago
The stock idea is dumb, in my opinion, because there were safer (no SEC) ways that required less capital and didn't require fancy trade accounts. For example: buy up a load of super cheap shitcoins. Can be done for under $100. Then tweet from an exchange like Binance that they will shortly be listing said shitcoin. Watch the price go up, sell. Or, with a bit more money, short one of the cryptocurrencies, tweet from a big exchange that they were hacked, profit on the panic selling. The nice thing is, they could do one or even multiple of these and still do the scam.
- DabbyDabberson 6y ago
  if you're someone whose regularly traded 10s of thousands of certain stocks over the last few years, it would be nearly impossible for them to detect a $100k profit from stock manipulation. especially a high volume stock like TSLA
  - janmo 6y ago
    Especially that Tesla is shorted so much. That said, shorting even with leverage requires you to have some money to invest. If you are 17 you are most likely broke.
    - DabbyDabberson 6y ago
      But the fact that _I_, could have made a higher return still holds. If I was 17 and broke, yeah the whole stock manipulation thing wouldn't be my first choice.
  - dkersten 6y ago
    If you’re someone who regularly trades you already have money and are unlikely to be hacking twitter accounts. Certainly a 17 year old isn’t going to be in that category.
- jb775 6y ago
  How exactly do you short a specific cryptocurrency?

by imgabe 6y ago

woutr_be 6y ago

If they knew up front they would be doing this, they could’ve shorted Tesla in smaller positions, over multiple accounts. There’s tons of people shorting Tesla, would it really be traceable to any of those?

vkou 6y ago
Yes, because the SEC isn't stupid, and would trawl through the data, until they found: * A set of freshly opened accounts. * That only shorted a single stock. * Right before a major hack. * That cashed out all at once. * That never traded again. And then they'd start calling the owners of those accounts, and asking questions. Most of those accounts would be legitimate traders, but that's fine - there's not that many accounts that satisfy four of those five criteria. A few sql queries can narrow it down to the point that basic detective work can solve the rest. The problem with playing stupid games on the stock market is that there's a very clear paper trail that will link you, as a human being, to the money that you're hoping to make. At least with bitcoin, you can theoretically isolate yourself from the source of the funds, through tumblers, transferring money in and out of shady exchanges, etc. This is also exactly how the SEC catches insider-traders. By analyzing the flow of trades, and following up on suspicious ones. If the first and only trade you've ever done in your life is a $200,000 short[1] on your employer twenty minutes before a disastrous earnings, you might soon be talking to a very nicely dressed man who would love to get another conviction under his belt. [1] If you think you're playing 34-d chess, and have done a bunch of other options trades surrounding it, to disguise it, you're just as likely to piss away all of your money before you even get a chance to insider-trade. That's the beauty of options - they will part a fool from their money before they can spit.
- jessaustin 6y ago
  It would be nice if SEC were this dogged in its pursuit of actual insider trading.
  - arthurcolle 6y ago
    Haha, that's a good one.
  - vkou 6y ago
    It is. Insider trading is one of the few things it is really good at prosecuting - mostly because it's dead-easy to identify, easy to prove, often performed by idiots, and has a lot of incredibly-well established law surrounding it that makes turning piles of evidence into jail time easy. None of these reasons hold for other financial crimes, which is why there are so few bankers and executives going to jail for everything that's not insider trading.
    - kortilla 6y ago
      Providing lots of examples of prosecutions does nothing to prove they catch even the majority of insider trades because there is no ground truth to work with here. Maybe the SEC is just good at catching people who don’t think through the paper trail.
    - jessaustin 6y ago
      Most "insider trading" is done by senior executives. As you observe, only non-connected "idiots" are ever prosecuted for insider trading. This "crime" is merely a way for corporate insiders to enforce penalties against those who defect from their conspiracy against the investing public. Non-insiders who trade on "inside" information release that information to the public, to the public's benefit, before the actual insiders are ready to profit at the public's expense.

dkersten 6y ago

The stock idea is dumb, in my opinion, because there were safer (no SEC) ways that required less capital and didn't require fancy trade accounts. For example: buy up a load of super cheap shitcoins. Can be done for under $100. Then tweet from an exchange like Binance that they will shortly be listing said shitcoin. Watch the price go up, sell. Or, with a bit more money, short one of the cryptocurrencies, tweet from a big exchange that they were hacked, profit on the panic selling. The nice thing is, they could do one or even multiple of these and still do the scam.

DabbyDabberson 6y ago
if you're someone whose regularly traded 10s of thousands of certain stocks over the last few years, it would be nearly impossible for them to detect a $100k profit from stock manipulation. especially a high volume stock like TSLA
- janmo 6y ago
  Especially that Tesla is shorted so much. That said, shorting even with leverage requires you to have some money to invest. If you are 17 you are most likely broke.
  - DabbyDabberson 6y ago
    But the fact that _I_, could have made a higher return still holds. If I was 17 and broke, yeah the whole stock manipulation thing wouldn't be my first choice.
- dkersten 6y ago
  If you’re someone who regularly trades you already have money and are unlikely to be hacking twitter accounts. Certainly a 17 year old isn’t going to be in that category.
jb775 6y ago
How exactly do you short a specific cryptocurrency?