5 ms·

Can someone explain to me why this is illegal?

CmonDev 12y ago
He tried to manipulate the market to take an advantage of the shift: http://en.wikipedia.org/wiki/Market_manipulation http://en.wikipedia.org/wiki/Market_manipulation You are not allowed to do this if you are a simple guy from the street.
- deleted 12y ago
  [deleted]
- throwaway183839 12y ago
  You are not allowed to do it, full stop.
  - CmonDev 12y ago
    I don't think High-Frequency and Investment Banks are following the rules. Until caught.
JetSpiegel 12y ago
China and Russia, man! Terrorism, or something.
dagw 12y ago
You're not allowed to place an order you have no intention of honoring. Basically it comes down to a question of his intent rather than his actions.
- fenollp 12y ago
  Then why does the API allow it?
  - throwaway183839 12y ago
    Are you suggesting that the API should read your mind to discover whether you really intend to trade on an order that you enter?
    - fenollp 12y ago
      I'm suggesting retraction should not be implemented in the first place
      - gd1 12y ago
        That's bizarre. So let's say AAPL is trading at $120, and you put in a limit order to buy it at $110, then you should never be allowed to cancel it? How long does the order sit there for? What if AAPL's price goes up to $400 over the next few months, do you have to leave your limit order there forever?
        sjtrny 12y ago
        I don't think fenollop means not withdraw it at all. He means after someone has said "I'll take that offer". At which point you can't withdraw it. So these people will make a loss of enough people take up their offers. This risk is mentioned in the article. It doesn't explain why "spoofing" is illegal though. It should be legal. They are trying to shift the market (so is everyone) through an action that exposes themselves to massive loses.
        kasey_junk 12y ago
        This system currently does not allow you to withdraw an offer once it has been matched. That is not what happened here. The reason "spoofing" is illegal is because it gives a huge information advantage to one party that the other parties do not have. Similarly to insider trading. I have no opinion on whether those should be illegal, but if the basic premise of the market changes from "we assume everyone here wants to trade" to "this information is garbage", it will definitely have a negative impact on the price of the traded instruments.

He tried to manipulate the market to take an advantage of the shift: http://en.wikipedia.org/wiki/Market_manipulation http://en.wikipedia.org/wiki/Market_manipulation You are not allowed to do this if you are a simple guy from the street.

deleted 12y ago
[deleted]
throwaway183839 12y ago
You are not allowed to do it, full stop.
- CmonDev 12y ago
  I don't think High-Frequency and Investment Banks are following the rules. Until caught.

JetSpiegel 12y ago

China and Russia, man! Terrorism, or something.

dagw 12y ago

You're not allowed to place an order you have no intention of honoring. Basically it comes down to a question of his intent rather than his actions.

fenollp 12y ago
Then why does the API allow it?
- throwaway183839 12y ago
  Are you suggesting that the API should read your mind to discover whether you really intend to trade on an order that you enter?
  - fenollp 12y ago
    I'm suggesting retraction should not be implemented in the first place
    - gd1 12y ago
      That's bizarre. So let's say AAPL is trading at $120, and you put in a limit order to buy it at $110, then you should never be allowed to cancel it? How long does the order sit there for? What if AAPL's price goes up to $400 over the next few months, do you have to leave your limit order there forever?
      - sjtrny 12y ago
        I don't think fenollop means not withdraw it at all. He means after someone has said "I'll take that offer". At which point you can't withdraw it. So these people will make a loss of enough people take up their offers. This risk is mentioned in the article. It doesn't explain why "spoofing" is illegal though. It should be legal. They are trying to shift the market (so is everyone) through an action that exposes themselves to massive loses.
        kasey_junk 12y ago
        This system currently does not allow you to withdraw an offer once it has been matched. That is not what happened here. The reason "spoofing" is illegal is because it gives a huge information advantage to one party that the other parties do not have. Similarly to insider trading. I have no opinion on whether those should be illegal, but if the basic premise of the market changes from "we assume everyone here wants to trade" to "this information is garbage", it will definitely have a negative impact on the price of the traded instruments.