SoylentNews

UK Citizen in Jail for Causing "Flash-Crash", or Just High-Frequency Trading?

posted by n1 on Sunday May 24 2015, @02:11PM   
from the justice-is-blind dept.

Whoever writes:

Nainder Sarao sits in jail because he cannot raise the £5M bail that is required for his release. He has apparently made millions while living in his parents' basement, but doesn't have access to the money because his accounts have been frozen. What is claimed by US authorities is that "... Mr Sarao placed "spoof" trades in E-Mini S&P derivatives in a bid to push the market in his favour. The orders would be placed and withdrawn in rapid succession using a customised computer programme, they allege", which sounds a lot like high-frequency trading. Perhaps his real crime was to copy the techniques of wealthy high-speed traders?

• Re:Order and cancel (Score: 0) by Anonymous Coward on Monday May 25 2015, @04:40PM

  by Anonymous Coward on Monday May 25 2015, @04:40PM (#187640)

  "Then you announce to the world that you are going to buy a billion shares at $99, through a limit order you intend to cancel."

  Well, obviously this may not be how you want to do it because something like this would be much more noticeable and harder to get away with. But what people probably do on a much smaller scale is they choose very small stocks to play with, one where much less money can have a relatively larger impact on prices. Such stocks are much easier to play with and it would be much more difficult to get noticed. For a multi-billion dollar corporation one may need billions of dollars to really affect the price and some average Joe Blow with no money isn't going to be able to make such a pending purchase in the first place yet alone be able to go unnoticed if they attempt to use billions of dollars they don't have to try and manipulate stock prices. But, yeah, you have the general idea.

  Parent