4 ms·

>Spoofing distorts the market by making it appear that there is much more liquidity and demand or supply. Distorted markets are, theoretically, bad for various

by uzakov 6y ago

>Spoofing distorts the market by making it appear that there is much more liquidity and demand or supply. Distorted markets are, theoretically, bad for various reasons. Commodities markets are underpinned by the idea of real price discovery happening: supply meeting demand at an agreeable price. Fake supply or demand undercuts this goal. Does this logic apply to non-financial field? If someone (person X) creates a fake demand for a SaaS service Y and company Z builds service Y, should X pay money because Z decided to build Y, without a written contract between X and Z?

yellowstuff 6y ago
I don't think that line of thinking will get you very far. You can pick up the ball and run with it in American football but not soccer. You can insider trade in US commodity markets but not US equity markets. Spoofing is illegal in US equity markets because that was the result of the rule-making process. I'd argue that banning spoofing is a good rule for equity markets, but it's not necessarily a good rule in other contexts.
- uzakov 6y ago
  That is exactly my point, see parent comment - "Spoofing distorts the market by making it appear that there is much more liquidity and demand or supply. Distorted markets are, theoretically, bad for various reasons." banning spoofing in different markets/fields isn't necessarily a good thing.
bleepblorp 6y ago
This will vary between jurisdictions but my understanding is that, yes, you can be sued for making a false promise to buy from a specific seller even if you don't get to the stage of a formal contract. Putting out a press release, or RFP, saying 'we want to buy X quantity of Y' without the intent to follow up isn't illegal. However, getting to the point of a handshake agreement with a specific vendor but then backing out means that you will be expected to pay compensation even though no formal contract was signed.
- uzakov 6y ago
  >"This will vary between jurisdictions but my understanding is that, yes, you can be sued for making a false promise to buy from a specific seller even if you don't get to the stage of a formal contract." Absolutely but simply stating interest or saying "We want to buy X quantity of Y", without having any agreement with a company or stating company name isn't agreeing to purchase nor should be seen (except certain situations) as bad
gpderetta 6y ago
I follow a bit the Magic the Gathering trading market (but stay away from it myself): being unregulated spoofing, market manipulation and insider trading are rampant and blatant. Also it is not a very efficient market, so the effects linger for a long time affecting people that just want to buy the cards to play.
- uzakov 6y ago
  I unfortunately do not know much about the Magic the Gathering but from I read online you collect cards and they vary in terms of power. Is it in some ways similar to Hearthstone? If yoy want to buy the cards to play, are you affected by the unregulated spoofing, market manipulation? Are you allowed to print your own?
  - gpderetta 6y ago
    It is similar (well, except that it precedes Hearthstone by a decade or two). Also Hearthstone is digital only, while Magic is played both in paper and on a couple of digital platforms. There is a thriving second hand market (both paper and digital) with prices going from a few cents (or less) for bulk commons to ten of thousands for first edition power 9. The cheapest (but still very expensive) way to play the game is to buy the cards you need on the market instead of opening up packs and hoping to find what you need. Speculators are known to buy up less liquid (printing of) cards to simulate demand, then unload them when the price is up. Not all (or even most) price spikes are due to speculators of course. Also there are often spikes of certain older cards before new sets are released which happen to contain new cards that work well these old cards, suggesting that insiders of Wizard of the Coast or retailers are leaking and/or trading on non public information. You can't print your own cards to participate in sanctioned tournaments, but of course, when playing with friends you can do whatever your playgroup allows.
    - uzakov 6y ago
      Thanks for providing a good overview! > Also there are often spikes of certain older cards before new sets are released which happen to contain new cards that work well these old cards, suggesting that insiders of Wizard of the Coast or retailers are leaking and/or trading on non public information. This obviously sucks > You can't print your own cards to participate in sanctioned tournaments, but of course, when playing with friends you can do whatever your playgroup allows. If you are a casual player, planning to play with friends only, are you actually hurt in any way by the speculators?

by uzakov 6y ago

yellowstuff 6y ago

I don't think that line of thinking will get you very far. You can pick up the ball and run with it in American football but not soccer. You can insider trade in US commodity markets but not US equity markets. Spoofing is illegal in US equity markets because that was the result of the rule-making process. I'd argue that banning spoofing is a good rule for equity markets, but it's not necessarily a good rule in other contexts.

uzakov 6y ago
That is exactly my point, see parent comment - "Spoofing distorts the market by making it appear that there is much more liquidity and demand or supply. Distorted markets are, theoretically, bad for various reasons." banning spoofing in different markets/fields isn't necessarily a good thing.

bleepblorp 6y ago

This will vary between jurisdictions but my understanding is that, yes, you can be sued for making a false promise to buy from a specific seller even if you don't get to the stage of a formal contract. Putting out a press release, or RFP, saying 'we want to buy X quantity of Y' without the intent to follow up isn't illegal. However, getting to the point of a handshake agreement with a specific vendor but then backing out means that you will be expected to pay compensation even though no formal contract was signed.

uzakov 6y ago
>"This will vary between jurisdictions but my understanding is that, yes, you can be sued for making a false promise to buy from a specific seller even if you don't get to the stage of a formal contract." Absolutely but simply stating interest or saying "We want to buy X quantity of Y", without having any agreement with a company or stating company name isn't agreeing to purchase nor should be seen (except certain situations) as bad

gpderetta 6y ago

I follow a bit the Magic the Gathering trading market (but stay away from it myself): being unregulated spoofing, market manipulation and insider trading are rampant and blatant. Also it is not a very efficient market, so the effects linger for a long time affecting people that just want to buy the cards to play.

uzakov 6y ago
I unfortunately do not know much about the Magic the Gathering but from I read online you collect cards and they vary in terms of power. Is it in some ways similar to Hearthstone? If yoy want to buy the cards to play, are you affected by the unregulated spoofing, market manipulation? Are you allowed to print your own?
- gpderetta 6y ago
  It is similar (well, except that it precedes Hearthstone by a decade or two). Also Hearthstone is digital only, while Magic is played both in paper and on a couple of digital platforms. There is a thriving second hand market (both paper and digital) with prices going from a few cents (or less) for bulk commons to ten of thousands for first edition power 9. The cheapest (but still very expensive) way to play the game is to buy the cards you need on the market instead of opening up packs and hoping to find what you need. Speculators are known to buy up less liquid (printing of) cards to simulate demand, then unload them when the price is up. Not all (or even most) price spikes are due to speculators of course. Also there are often spikes of certain older cards before new sets are released which happen to contain new cards that work well these old cards, suggesting that insiders of Wizard of the Coast or retailers are leaking and/or trading on non public information. You can't print your own cards to participate in sanctioned tournaments, but of course, when playing with friends you can do whatever your playgroup allows.
  - uzakov 6y ago
    Thanks for providing a good overview! > Also there are often spikes of certain older cards before new sets are released which happen to contain new cards that work well these old cards, suggesting that insiders of Wizard of the Coast or retailers are leaking and/or trading on non public information. This obviously sucks > You can't print your own cards to participate in sanctioned tournaments, but of course, when playing with friends you can do whatever your playgroup allows. If you are a casual player, planning to play with friends only, are you actually hurt in any way by the speculators?