5 ms·

This would seem to be a new way to monetize hacks. Go short on the market, trigger your fake tweet, wait a few seconds for the flash crash, and cover your shor

This would seem to be a new way to monetize hacks. Go short on the market, trigger your fake tweet, wait a few seconds for the flash crash, and cover your short. You could make huge profits this way. I wonder if someone did in this case.

johnrydell 13y ago
You would have to be very, very fast and sophisticated to make a successful 30 second trade!
- wmeredith 13y ago
  I think the current state of trading technology at the moment could be perfectly described as, "very fast and sophisticated."
- cschmidt 13y ago
  It would be hard for a "retail investor" like myself, but 30 seconds is a lifetime to the high frequency guys. I'm sure there is a pretty big group of people who would have no trouble doing it.
- chollida1 13y ago
  I guess it depends on your definition of "fast and sophisticated" but any decent trading system can do 5 orders a second. Any trading system used for actual algo trading can do 100 orders/second without blinking. High frequency starts around 1,000 orders/second.
tartuffe78 13y ago
Seems like this would be pretty easy for the SEC to spot if you were doing any kind of volume.
- Houshalter 13y ago
  So what? As long as there is no evidence tying you to the hack. You could just claim it was a coincidence, that you were expecting the market to go down for other reason.
  - fyi80 13y ago
    And then you get called in for lengthy interviews, and you get scared and make unrelated false statements, and get convicted of a felony. C.f., Martha Stewart.
zxer 13y ago
Seems strangely similar to the allegedly planned bitcoin attack from 2 days ago: http://www.reddit.com/r/Bitcoin/comments/1cu4ck/ridiculous_ddos_operation_set_up_for_monday/c9jzrp1 http://www.reddit.com/r/Bitcoin/comments/1cu4ck/ridiculous_d... It also started with a first step to "Spread bogus AP press releases".
at-fates-hands 13y ago
Frighteningly easy considering there is no verification going on before the market reacts to these kind of things.
- criley 13y ago
  Acting quickly on news is a risk that they hope will pay a reward, but there is no guarantee that the news is correct and thus the risky position will be rewarded. If you wait for verified, accurate news, then anyone who moved before got to move before you. Thus, participants in that market move when they want to accept the risk they want. It doesn't matter if you verify Twitter with the best security around because markets will and always have reacted to rumor and unverified speculation and news. It's a gamble that the participants willingly make.
theorique 13y ago
Highly illegal though - it's market manipulation and the SEC would be on your case (assuming they could find out who you are).
- cschmidt 13y ago
  Clearly it would be illegal. I was thinking about this as an extension of the market for day 0 exploits. Say you have found a new exploit. According to articles like this, you would typically sell it to some government spy agency, or even worse "bad guys", for something up to $500k. http://www.economist.com/news/business/21574478-market-software-helps-hackers-penetrate-computer-systems-digital-arms-trade http://www.economist.com/news/business/21574478-market-softw... This would be a way of converting that exploit into much more. If you had some experience in finance (or knew the right people), you could easily make millions on a series of trades. Illegal, sure, but this is for a person already used to dealing in very shady corners.

johnrydell 13y ago

You would have to be very, very fast and sophisticated to make a successful 30 second trade!

wmeredith 13y ago
I think the current state of trading technology at the moment could be perfectly described as, "very fast and sophisticated."
cschmidt 13y ago
It would be hard for a "retail investor" like myself, but 30 seconds is a lifetime to the high frequency guys. I'm sure there is a pretty big group of people who would have no trouble doing it.
chollida1 13y ago
I guess it depends on your definition of "fast and sophisticated" but any decent trading system can do 5 orders a second. Any trading system used for actual algo trading can do 100 orders/second without blinking. High frequency starts around 1,000 orders/second.

tartuffe78 13y ago

Seems like this would be pretty easy for the SEC to spot if you were doing any kind of volume.

Houshalter 13y ago
So what? As long as there is no evidence tying you to the hack. You could just claim it was a coincidence, that you were expecting the market to go down for other reason.
- fyi80 13y ago
  And then you get called in for lengthy interviews, and you get scared and make unrelated false statements, and get convicted of a felony. C.f., Martha Stewart.

zxer 13y ago

Seems strangely similar to the allegedly planned bitcoin attack from 2 days ago: http://www.reddit.com/r/Bitcoin/comments/1cu4ck/ridiculous_ddos_operation_set_up_for_monday/c9jzrp1 http://www.reddit.com/r/Bitcoin/comments/1cu4ck/ridiculous_d... It also started with a first step to "Spread bogus AP press releases".

at-fates-hands 13y ago

Frighteningly easy considering there is no verification going on before the market reacts to these kind of things.

criley 13y ago
Acting quickly on news is a risk that they hope will pay a reward, but there is no guarantee that the news is correct and thus the risky position will be rewarded. If you wait for verified, accurate news, then anyone who moved before got to move before you. Thus, participants in that market move when they want to accept the risk they want. It doesn't matter if you verify Twitter with the best security around because markets will and always have reacted to rumor and unverified speculation and news. It's a gamble that the participants willingly make.

theorique 13y ago

Highly illegal though - it's market manipulation and the SEC would be on your case (assuming they could find out who you are).

cschmidt 13y ago
Clearly it would be illegal. I was thinking about this as an extension of the market for day 0 exploits. Say you have found a new exploit. According to articles like this, you would typically sell it to some government spy agency, or even worse "bad guys", for something up to $500k. http://www.economist.com/news/business/21574478-market-software-helps-hackers-penetrate-computer-systems-digital-arms-trade http://www.economist.com/news/business/21574478-market-softw... This would be a way of converting that exploit into much more. If you had some experience in finance (or knew the right people), you could easily make millions on a series of trades. Illegal, sure, but this is for a person already used to dealing in very shady corners.