Forum - Futures Trader Arrested For Causing 2010 'Flash Crash'
News Fetcher
Joined: Oct 24 2009
Last Active: Never/Not tracked
Total Active: Never/Not tracked
Timezone: GMT+ -7
124242 posts
Last Page Viewed:
Post 115228       April 21 '15 at 03:30 PM
By Soulskill from Slashdot's moving-at-the-speed-of-government department:
New submitter dfsmith writes: Apparently the "Flash Crash" of the stock market in May 2010 was perpetrated by a futures trader in the UK. The US Justice Department alleges that he used a "dynamic layering scheme" of large-volume sell orders to confuse other buyers, hence winning big in his futures trades. "By allegedly placing multiple, simultaneous, large-volume sell orders at different price points—a technique known as 'layering'—Sarao created the appearance of substantial supply in the market. As part of the scheme, Sarao allegedly modified these orders frequently so that they remained close to the market price, and typically canceled the orders without executing them. When prices fell as a result of this activity, Sarao allegedly sold futures contracts only to buy them back at a lower price. Conversely, when the market moved back upward as the market activity ceased, Sarao allegedly bought contracts only to sell them at a higher price."
Decepticon Keii
Spending Billions to Destroy 1 Robot Boy
Keii's AV
Decepticon Decepticon
Joined: Mar 26 2003
Last Active: Apr 28 15
Total Active: 346h 39m 30s
Timezone: GMT+ -5
2643 posts
Last Page Viewed:
News
Spending Billions to Destroy 1 Robot Boy
Keii's AV
Post 115230       April 21 '15 at 04:43 PM
"Creative use of game mechanics"