For those looking for a TLDR, here's the part of the article explaining the actual trades. You'll need to know what WTI is (https://www.investopedia.com/terms/w

For those looking for a TLDR, here's the part of the article explaining the actual trades. You'll need to know what WTI is (https://www.investopedia.com/terms/w/wti.asp https://www.investopedia.com/terms/w/wti.asp) and Trade-at-Settlement is (PDF https://www.theice.com/publicdocs/futures_us/TAS_FAQ.pdf https://www.theice.com/publicdocs/futures_us/TAS_FAQ.pdf). > Here’s how it works: Imagine a trader sees that WTI is at $10 and predicts it’s going to end the day at $5. To capitalize, he buys 50,000 barrels in the TAS market, agreeing to purchase oil at wherever the price ends up by 2:30 p.m. At the same time, he starts selling regular WTI futures: 10,000 barrels for $10 and then, if the market is falling as predicted, 10,000 more at $9, and again at $8. As the settlement window approaches, the trader accelerates his selling, offloading a further 10,000 contracts at $7, then another chunk at $6, helping push the price lower until, sure enough, it settles at $5. By now he is “flat,” meaning he’s sold as many barrels as he’s bought and isn’t obliged to take delivery of any actual oil. > The trader’s bet has come off. His profit is $150,000, the difference between what he sold oil for (50,000 barrels at prices ranging from $10 to $6, for a total of $400,000) and what he bought it for in TAS contracts (50,000 barrels at $5 a barrel, or $250,000). All of this is perfectly legal, providing the trader doesn’t deliberately try to push the closing price down to an artificial level to maximize his profits, which constitutes market manipulation under U.S. law. Manipulation can result in civil penalties such as fines or bans, or even criminal charges carrying a potential prison sentence of up to 10 years. It’s also illegal in the U.S. to place trades during or before the settlement with “intentional or reckless disregard” for the impact. What surprises me is that this can be considered illegal due to “intentional or reckless disregard”, which seems like an extremely subjective thing to evaluate. Are our regulations really written in this manner? I'm also unclear on if such trades SHOULD be considered wrong. Take this quote from the article concerning another organization that was investigated for illegal market manipulation: > Email and phone records showed Optiver’s traders talking about trying to “hammer” and “bully” the settlement after accumulating TAS. Such clear-cut evidence of intent is rare. Why is "intent" important? Isn't it rational to try to "win" in a psychological game of price-prediction/setting where all the participants are adversaries, in a way? Isn't every consideration of a potential trade an act of "market manipulation" to some extent? What makes it problematic - is it collusion?