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There are two possibilities here: this guy has been set up as the patsy to take the fall for this or, more terrifying, our markets are so brittle and levered th

There are two possibilities here: this guy has been set up as the patsy to take the fall for this or, more terrifying, our markets are so brittle and levered that a guy at home with no juice can wipe out a trillion in notional value from his home. I pray that the former is the more likely scenario as the latter is simply too awful to contemplate.

brownegg 12y ago
The latter is somewhat true, and probably unavoidable at this point. "The cat is out of the bag", so to speak--markets can't just go back. The problem is that the incentives are so wildly disproportionate. If a really smart guy works for the SEC or some surveillance body, he might $200k a year. That same really smart guy might make $200 MILLION trading. It has to be awfully damned unlikely to not choose the latter. And in reality, you're probably pulling $100k somehow or another while you wait. With respect to the idea that this guy is the culprit, that's literally laugh-out-loud funny. It's possible he was spoofing, etc., even with decent size. But the clearing firm (Hi, MF!) controls the throttles on those pipes. But there is what is called "sponsored direct access" in these markets, and that basically means the clearer wants your business enough you can just hook up directly so you can go really fast, and they (the clearer) will just pretend that they're looking at your stuff.
- filipet 12y ago
  200$ millions trading by themselves, without external investors? Very, very unlikely.