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posted by martyb on Sunday October 16 2016, @12:53PM   Printer-friendly
from the where-were-the-air-bags? dept.

Navinder Sarao has lost his appeal and is set to be extradited to the USA, where he faces charges with a possible maximum sentence of 380 years. He is accused of causing the "flash crash" in 2010, when the Dow Jones index dropped by 1000 points. He ran his trading from his bedroom in his parents' house and it is claimed that he made more than £30M (approximately $40M) in 5 years. His parents had no idea what he was doing, nor the scale of his income. He is accused of placing trades that he never intended to fill, so, to this naive person, it's hard to distinguish what he did from that of the large high-speed trading firms.


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  • (Score: 3, Insightful) by Snotnose on Sunday October 16 2016, @02:34PM

    by Snotnose (1623) on Sunday October 16 2016, @02:34PM (#414859)

    Not quite, you get to withdraw say 2 orders a day. I take it you've never placed a buy order, hit 'submit', and got an 'aww crap' moment as soon as you do.

    Let the little guy make a mistake or two. Fark the big guys who do this thousands of times a day.

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  • (Score: 1) by Francis on Sunday October 16 2016, @02:58PM

    by Francis (5544) on Sunday October 16 2016, @02:58PM (#414864)

    I've never, but I'm not sure there'd be any real harm from allowing people to remove one or two orders a day, assuming the price hasn't changed in their favor.

    The system is set up in a way that favors two kinds of investment strategies, one is to go in with a ton of lawyers and millions of dollars worth of computing equipment and go the high frequency trading route and the other is to do it old school, actually understand what you're buying when you buy firms and then hold onto them for many years.

    I guess, the only other good strategy is to just go with index funds and bonds.

    • (Score: 2, Informative) by khallow on Sunday October 16 2016, @03:41PM

      by khallow (3766) Subscriber Badge on Sunday October 16 2016, @03:41PM (#414873) Journal

      The system is set up in a way that favors two kinds of investment strategies, one is to go in with a ton of lawyers and millions of dollars worth of computing equipment and go the high frequency trading route and the other is to do it old school, actually understand what you're buying when you buy firms and then hold onto them for many years.

      It is an emergent property of markets in general that these two investment strategies exist. The first is the market making strategy. It's a trader who specializes in trading on the spread that exists in any market. They sell to the buyers and buy from the sellers. They aren't interested in long term shifts of the value of the market good because they don't hold onto it long enough to matter. Most traders don't have the time or will to figure out the best short term trades. That's why the opportunity for market maker profit exists in the first place.

      Long term investors (which routinely include long term consumers of the traded good), of course, do care what the future value of a good is and trade at a far lower frequency than the market maker.

  • (Score: 5, Interesting) by Whoever on Sunday October 16 2016, @07:34PM

    by Whoever (4524) on Sunday October 16 2016, @07:34PM (#414927) Journal

    The deck is stacked.

    Remember when Knight Capital screwed up and lost hundreds of millions of dollars in a few minutes? They got to reverse some of the trades. Think about that for a minute. Imagine that you were on the other side of one of those trades and you made a nice profit. All of a sudden, the people who run the market decide that you don't matter as much as Knight and your profit no longer exists.