This page has been archived and commenting is disabled.

HFT Stock Manipulation Caught On Tape

Tyler Durden's picture


It doesn't get any more blatant than this. Once again, courtesy of Nanex we present to our incompetent regulators prima facie evidence of what is outright tape painting via what is an apparent HFT algo trying either to front run an order, to test for the presence of other predatory algos, and in general to take advantage of Reg NMS only protecting displayed liquidity over non-displayed (a topic we discussed two years ago). In the example below, which shows unique trades in the stock of XEL.PR.G, in the span of 30 seconds, 430 shares are bought up on the way up from $90.5 to $102.25, and then sold off once again in another 10 seconds, hitting all bids as soon as they appeared. Now this is not some HFT-darling which trades millions of shares per day (and sees blasts of tens of millions of quote stuffing packets in hours) and thus will likely be ignored by the general population... until it does hit some stock that people do care about. Naturally the implication is that, as Nanex points out, if all stocks traded/quoted at this frequency, even the the SEC could figure this out in a few weeks, after assembling a multi-discipilanary team of course. Is it any wonder that virtually nobody trades on open exchanges anymore (yes, most trading, or what's left of it has shifted to Sigma X and other dark pools) where the only survival tactic for such legacy monsters as the NYSE and Nasdaq is to laterally buy up as many of their peers as they can now that organic growth no longer exists: gotta love a world in which there are 83 different ATS venues, all of which permit some permutation of millions of stock manipulation strategies.

Trade and NYSE Quote Price for XEL.PR.G

Trade and quote prices across all exchanges:

Trade summary/balance sheet:

And a complete list of the labyrinth of over 80 Alternative Trading Systems currently in operations:

ATS List


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 06/04/2011 - 11:56 | 1339219 DK Delta
DK Delta's picture one does this shit better than you guys...I don't know where you find this stuff but keep it up

Sat, 06/04/2011 - 14:20 | 1339533 LongBalls
LongBalls's picture

I just started following this site. I am downright in awe of your reporting in truth and accuracy of pertinent information. Keep it up fighter!!! History will judge you in the best of light. We are here to support you!!! We have to stick together. There WILL be a tipping point in all this madness !!!

Sat, 06/04/2011 - 14:34 | 1339565 dark pools of soros
dark pools of soros's picture

Goldman already bought the rights to the ZH movie deal.. Kudlow is doing the screenplay

Sat, 06/04/2011 - 17:04 | 1339871 Hulk
Hulk's picture

I hear Pitt has been casted as Durden...

Sat, 06/04/2011 - 21:58 | 1340402 sheeple2012
sheeple2012's picture

Harvey Pitt? 

Sat, 06/04/2011 - 22:53 | 1340481 Thomas
Thomas's picture


Sat, 06/04/2011 - 11:59 | 1339222 Manthong
Manthong's picture

Just wait till a few of those secret autonomous search and destroy robots the military has break loose.

Those are some algos to worry about.

Oh.. they're loose already?

Sat, 06/04/2011 - 14:13 | 1339510 Reptil
Reptil's picture

Yeah the ones that feed on bio-organic matter, like dead people, to replenish their batteries, and are, in case they're cut off from the line to the spotty teenager playing videogames whilst getting payed, equipped with algos that become fully autonomous, and will go into "survival mode", whatever that may be.

Oh and they learn to. (no joke)

Sat, 06/04/2011 - 14:53 | 1339622 Whatta
Whatta's picture

and can reincarnate themselves into mutant robotic sharks with death ray eyes and night vision goggles that can see the future?


who is going to be the first exchange to offer a for-fee service that gives you tomorrow's close that we non's can have a chance to play this game?

Sat, 06/04/2011 - 13:01 | 1339228 mberry8870
mberry8870's picture

From Dodd Frank (yes legislation that has passed i.e. this is law)


In section 747 of the Dodd-Frank Act,

Congress amended the CEA to expressly

prohibit certain trading practices that it

determined were disruptive of fair and

equitable trading.


(A) violates bids or offers;


(B) demonstrates intentional or

reckless disregard for the orderly

execution of transactions during the

closing period; or

(C) is, is of the character of, or is

commonly known to the trade as,


‘‘spoofing’’ (bidding or offering with the

intent to cancel the bid or offer before




Sat, 06/04/2011 - 12:02 | 1339232 mberry8870
mberry8870's picture

This is also applicable to the SEC as well as the CFTC

Sat, 06/04/2011 - 12:06 | 1339236 augie
augie's picture


meanwhile they have park cops with ar-15's in the jefferson memorial to stop people from dancing. I mean literally, the act of dancing.

to move one's feet or body, or both, rhythmically in a pattern of steps, especially to the accompaniment of music.
Sat, 06/04/2011 - 22:40 | 1340460 2bigtoofail
2bigtoofail's picture

Well you sure would not want freedom of expression to take place without permission within sight of the supremem overlords in DC. If people ever exercise their "freedom" they need to be immediatly represed and punished for such blatant acts of treason. It is truely a sorry state we now find ourselves in. Divorced from the principles of natural law that were the very in spiration for the revolution in the first place. That Magna Carta is quite unknown to most and forget finding anyone who even cares enough to know what is enshrined within the bill of rights. Insider trading will not be policed until people are awake enough to care. Good post.

Sat, 06/04/2011 - 12:06 | 1339243 breezer1
breezer1's picture


thats all i have to say on this matter.

Sat, 06/04/2011 - 12:06 | 1339244 Astrolabe
Astrolabe's picture

would some kind soul please explain, as though they were speaking to a 5th grader (because i am in fact a 5th grader) what exactly is going on here?

thank you in advance!

Sat, 06/04/2011 - 12:12 | 1339250 augie
augie's picture

Someone correct me if i am wrong but i believe this is a phishing algorithm which aims at locating large orders at specific price levels to discover market depth or how many people want to buy and sell the security or stock.

Sat, 06/04/2011 - 12:20 | 1339257 mberry8870
mberry8870's picture

Pretty close but it also can be an attempt to send a false signal to the market that the increase (or decrease) in price has something to do with fundamentals. If the intent is to send a false signal in order to induce someone to act this would be a fraud. Making the distinction between determining liquidity and depth v. manipulation is beyond my capabilities.

Sat, 06/04/2011 - 12:26 | 1339262 augie
augie's picture

awesome thank you.

Sat, 06/04/2011 - 14:18 | 1339512 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

severe remedial student clumsily asks for additional clarification:

More please!  I am going to make a trainwreck out of the wording, please bear with me. Perhaps if I ask this in a minimalist manner it won't be too painful... 

Am I correctly grasping that the following is an important detail?  If so, what can be inferred from it?

* Two charts -- same period -- same stock

* One is NYSE "perspective" only -- other is composite "perspective"

* On the NYSE chart, highest priced trade is "free-floating" -- but on the composite chart it is intersected by yellow plot (PACF Ask).  This PACF Ask also stands out because it seems to 'anticipate' the peak of the series before the 'walk up' starts.

Is this meaningful or FAIL?  If it is meaningful what does a knowledgable individual infer from what they see here (from that specific piece of the picture)?

Sat, 06/04/2011 - 13:37 | 1339433 Manthong
Manthong's picture

Synthetic tatonnement on digital nanosecond steroids.

Sat, 06/04/2011 - 12:30 | 1339263 Cdad
Cdad's picture

You are correct.  This is ONE thing that is going on.  

When the upside block sell order is discovered, a short position is set one hundredth of a penny in front of it, and then the long side of the book is unloaded driving the price back down, the assumption being that the large seller will commence chasing the falling bid downward, creating nice price action for the newly set short position.

This happens on on the opening of the market, first hour, every day.  The idea is to discover the downside support and upside resistance as measured by where the blocks are, which is why you get that up/down...or down/up pattern in the morning.  The spread is played until the side with the most conviction is established [in theory anyway, because as we all know, the algorithms have been bullish for two years resulting in a move up in the second half of the day...always].

Considering that the S&P absolutely broke down on Wednesday, the pattern will now likely be reversed, with discovery moving upward first, and then cascading down in the second half of the day [on the indexes anyway]...but I digress.

More recently, I have seen equities move up...WITH NOT TRANSACTIONS AT ALL.  Anyone else seeing this?  The bid is simply raised.

By the way, in mid 2007, algorithmic trading was 26% of market volume.  At present, it represents 80% of all trades by volume.  So folks should be getting their pulse rifles tuned up and sighted in because, as I recall, things did not exactly work out well for humans in the Terminator movies.

Sat, 06/04/2011 - 12:35 | 1339273 Hulk
Hulk's picture

I can't possibly thank you enough for that... stunning.

Sat, 06/04/2011 - 12:39 | 1339279 Yes_Questions
Yes_Questions's picture

Skynet Securities.

Sat, 06/04/2011 - 12:49 | 1339293 rocker
rocker's picture

@cdad  'I have seen equities move up...WITH NO TRANSACTIONS AT ALL'   

Man, I am glad someone else has picked up on this. Many will move up and down without a single buy or sell. Amazing to watch.

Sat, 06/04/2011 - 13:09 | 1339358 Cdad
Cdad's picture

It kind of redefines the entire notion of "supply and demand."  In the case of the bid that rises without a transaction, the "supply" is someone who wants to sell it higher [selling that causes a stock to rise], while on the buy side there is...ummm....Casper?  In reality, what is often happening is that someone has shorted the stock...and that someone needs to be rolled up even if Casper is the only buyer to do the work...or some such computerized nonsense.  

This "special situation" requires a certain kind of stock [perhaps, not unlike the example that Tyler has provided...although I don't know a thing about the stock to which he is referring].  You see it often on a stock that is extended massively to the upside.

The market has zero integrity.  In fact, it is perhaps more accurate to say there is NO market anymore...but rather there is this massive "instrument" whose only function is minute to minute price action, action that is disassociated from the very things that the criminal syndicate Wall Street bankers talk about on the BlowHorn [CNBC] all the time:  "historical valuations", "growth", "channel checks" [my favorite], "blah" "blah" "blah."

Sat, 06/04/2011 - 13:30 | 1339402 augie
augie's picture

Heh, my brothers an HFT guy in chicago and I think he might disagree with the machines taking over completely but awesome explination none the less. Thank you so much for that insight you just informed a lot of people.

Sat, 06/04/2011 - 14:21 | 1339532 Cdad
Cdad's picture

I see now that my thoughts are not exactly in tune with Tyler's example...although my thoughts about HFT criminals are not unique and well established by many.  Allow me to refine them to more closely approximate his example.

Tyler's example also illustrates yet another of the crimes going on, namely executing trades well outside the established "market" as implied by the bid ask spread.  This was HUGE in 2007 right before the market collapsed.

My thoughts on how this particular thing happens has to do with the fractured nature of the "market" via the endless venues Tyler points out in his list.  The trick, as I saw it happening in '07, was the meeting of fill or kill orders priced to the fourth decimal point.  In Tyler's example, this fourth decimal point trick is not being used, but very often is on the stuff I see. Bear with me.

In summer of 2007, it was quite common to see incredibly wide spreads on stock transactions during days when the market was distressed.  I remember that the MSM explanation of this phenomena on several days when this was going on was that the NYSE messaging system was overloaded.  Gee, I wonder what would have overloaded their system?

Anyway, during this particular time that I am talking about, the bid and the ask were irrelevant when considering where trades where actually occurring.  Trades were going off on Boeing, for example, a couple bucks below the bid and a couple bucks above the ask.  This would go on for hours, mind you.  And all of these trades were priced to four decimal points.  Now four decimals points is just fine when they occur between the spread because the market maker is simply splitting the difference to facilitate both the buyer and the seller.  However, there is no logical reason for this to occur outside of the bid/ask spread....unless....unless...

...these were matched orders, supposedly a perfect fit for the parties involved.  A perfectly efficient market, you might say. This is illegal, mind you, and back then I did some research on "matched orders" and discovered that some guys were actually prosecuted for this back in 1994...or 1996.

I did everything I could in my simple, useless human form to see if I could buy stock on these wide spreads that were printing money minute to minute, but alas, I could not get filled.  Of course, despite how I was bidding the same line on which the algo kings were filling, my lowly two decimal point bids were obviously considered inferior by market makers...err...Terminators.

There are 100 other such ways to cheat this electronic market...I mean this "price action instrument."  I understand that Mary Shapiro is just about done with her relentless, year long meetings with Goldman Sachs and JP Morgan about which SEC laws she should enforce, and which SEC laws she should just forget about.  And I'm sure, any day now, the SEC is going to do its job.

And so as Duncan Niederauer now spends his days selling the floor of the New York Stock Exchange to the Germans, we have him, in part, to thank for the co located computers in the room next to where he takes his afternoon constitutional.  And if anyone actually thinks that capital will form in a market or in banks as corrupt as ours, well maybe they ought to give up watching Dancin' with the Stars on their iPad2 and instead write letters to their congressman.

Until such time, please enjoy the continuing Summer of Recovery.

Sat, 06/04/2011 - 15:27 | 1339689 augie
augie's picture

I was really under the impression that there were some "honest" (whatever that means) HFT firms out there but i guess not. Damn.

Sat, 06/04/2011 - 21:23 | 1340319 BlackholeDivestment
BlackholeDivestment's picture

Cdad, write letters to Congress, lol, now that's a good one.

Sun, 06/05/2011 - 10:39 | 1341108 blindman
blindman's picture

speaking of letters to reps.
EXCELLENT! (*****)

Posted on June 5, 2011 by maxkeiser| 26 Comments
see comments and link at link.

Sat, 06/04/2011 - 14:41 | 1339574 blindman
blindman's picture

@.."By the way, in mid 2007, algorithmic trading was 26% of market volume. At present, it represents 80% of all trades by volume."...
so what is the point or attraction of being human in this new

Sat, 06/04/2011 - 21:30 | 1340344 BlackholeDivestment
BlackholeDivestment's picture

ZERO! ah haa haa haa...

Mars ain't the kind of place to raise a kid.

Sun, 06/05/2011 - 13:21 | 1341100 blindman
blindman's picture

that ! ...i'm sorta speachless. w.s. has some
remarkable skills but i will not make any remarks
beyond !. ok., he could read the phone book and
make it dramatic and funny.
Ground Control To Major Tom (Animation) "Space Oddity"
so, the machines, man made, have turned man power into
horse power etc.. and now man is consumer and useless
breeder stock? a parasite of his own making? is this
the predominant narrative we are being indoctrinated with?
some might object and take exception.
this just in
Our Feature Presentation: Ronnie “The Rocket” O’Sullivan Fastest 147

Sat, 06/04/2011 - 15:16 | 1339673 ThirdCoastSurfer
ThirdCoastSurfer's picture

Is it just me,  or is it obvious to professionals when orders from retail accounts are in play? Even as a retail investor I have seen Level 2 postings of my submissions clearly indicating my retail brokers submission as it seeks fulfillment across all exchanges. Clear proof of this is the ability top submit a "hidden stop" while bids and offers sit out there like a "kick me" sign on the arse. Talk about piranha activity in this low volume, HFT environment! There are more hedge funds than stock listings.  How do pay the bills, procure billions in bonuses across numerous firms and boast of never having a losing trading day in a quarter? It's like sitting down at a high stakes poker game against players with unlimited funding. Once they identify you as someone who doesn't belong, someone independent, they can just keep raising the ante until you're forced to fold. 

Furthermore, when I buy a stock, my broker actually has control of the shares and can offer them as shorts. Another huge clue to Ali Baba and the 40 thieves.

The "2B2F" group has seen a lot of regulation and most have actually left or reformed their game but no one is looking at the retail side of the abuse and this is just a big part of the problem as Goldman trading against its clients.   

Sat, 06/04/2011 - 20:29 | 1340239 fellatio is not...
fellatio is not fattening's picture

A small point, but if you do NOT want your shares loaned out for margin than hold them in a cash acct.  Your margin agreement says you allow the shares to be "hypothicated" meaing loaned out, in a cash acct. they cannot loan them out.

Sat, 06/04/2011 - 12:15 | 1339251 Canaduh
Canaduh's picture

They are using fancy math on world class computers to prey on false assumptions of the sheep.

Sat, 06/04/2011 - 13:11 | 1339352 Yes_Questions
Yes_Questions's picture

Sheep, hell, they prey on each other.

The hole through which the blood funnel sucketh need not be pierced through innocent skin.

Sat, 06/04/2011 - 12:23 | 1339258 fellatio is not...
fellatio is not fattening's picture

I don't really understand the activity but as a novice if they execute all these trades and bring the stock UP than see just as quickly and bring the stock down, where do they make any money?  There can't be much order flow payment, please help explain.  I do understand HFT getting paid for shares traded and even if it's fractions of a penny doing 100's of millions of shares a day = real money, but not this preferred.  Thanks

Sat, 06/04/2011 - 12:25 | 1339259 Yes_Questions
Yes_Questions's picture

incompetent regulators

They aren't equipped to regulate, and those posted to the task appear symbolic anyway.

I am neanderthal when it comes to equities by choice because of this HFT bullshit.  By time one decides to BTD, there's a fucking predatory algo out there designed to fleece me before I complete a trade?

Makes sense people are flocking to physical stores of value.

I know I am probably missing something by not actively trading stocks, but it seams my mental health is better off avoiding this casino. 




Sat, 06/04/2011 - 12:38 | 1339282 Cdad
Cdad's picture

And did you know that your broker is also involved in assisting the algo in its task of fleecing you?  Indeed.  Ever place an intraday stop order only to watch it "advertised" on the L2 book?  That isn't supposed to happen.  On a stop loss, the order is only supposed to be revealed when the bid draws near to it.  That isn't exactly how it works, however.

Then there is, of course, your broker's internal transactions based on its desire to buy or sell...and how it makes you its mule.

I could go on and on about this, as I have been watching this HFT crime wave on the granular level for a long time.  What is most disturbing to me, and most broadly, is how the criminal syndicate Wall Street banks apparently are not at all concerned about the integrity of the market.  Once integrity [or read in reputation] is lost, it takes generations to restore that...which is why my theory for a long time now has been...this is [err...was] the LAST rally.

Sat, 06/04/2011 - 12:55 | 1339303 Yes_Questions
Yes_Questions's picture

Thanks for articulating, btw.

I had a feeling before stumbling on this site that the "market" would be a spider web for me, and posters like you have helped confirmed my suspicions.

Don't get me wrong, the complexity I see in trading is very attractive to me but only in the sense of detecting and avoiding traps.  Not for making money.

My own risk tolerance has me wanting to go in with the equivalent of a tuned pulse rifle just to at least feel like I would have an advantage. 


Sat, 06/04/2011 - 14:35 | 1339554 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

 That isn't supposed to happen.  On a stop loss, the order is only supposed to be revealed when the bid draws near to it.  That isn't exactly how it works, however.

Another burning question answered for me.  Thank you.

Sat, 06/04/2011 - 12:33 | 1339271 Franken_Stein
Franken_Stein's picture


I hate to say it, but Lawrence Eagleburger has joined Alexander Haig in being dead.


Sat, 06/04/2011 - 12:37 | 1339278 VyseLegendaire
VyseLegendaire's picture

Pullitzer Prize? Lol fuck that shits for shills. 

Sat, 06/04/2011 - 12:41 | 1339281 JW n FL
JW n FL's picture

Look! Bottom LINE!! Tyler! I Luv Ya Man! But in this Country, America! If you tell the Truth! You will go to Jail!


Do YOU! Understand? if you tell the truth! you will go to jail! for some reason, they will find a way to put you behind bars to shut you up!


see proof below!


UBS Whistle Blower in Jail for helping the IRS with over 2,000 Tax Dodgers!  

'Austrian tax evasion whistleblower' dies in Swiss jail

Swiss tax whistleblower to give WikiLeaks new data & in Jail for it  


Corporations Own the Lobby!


The Lobby Owns the Government!


Law Enforcement works for the Duly Elected Lobby Whores!


“We the People” are Screwed!

Top U.S. Lobbying Banks Got Biggest Bailouts


1.    [PDF]

A Fistful of Dollars:Lobbying and the Financial Crisis; Financial ...

File Format: PDF/Adobe Acrobat - View as HTML
A Fistful of Dollars: Lobbying and the Financial Crisis by. Deniz Igan ...

Rigged Market Capitalism & Propaganda within the U.S. by the U.S. PLUS! PLUS!!


Top 10 corporations which paid no taxes

Here is Sen. Sanders’ list of the 10 worst corporate income tax avoiders:

1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here.)

2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: here, ProPublica here and Treasury here.)

3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)

4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)

5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)

6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)

7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)

8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)

9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)

10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.) General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes

$39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID!

$10 billion sale of F.D.I.C.-backed debt


Senate Republicans blocked a Democratic Bill to End tax Breaks for Moving U.S. Jobs Offshore! 

50,000 Manufacturing Jobs a Month since 2001 have LEFT! The United States for China!

Republicans to roll out new tax-cut proposal: WSJ
25 May 2011
, by Michael Kitchen - Los Angeles (MarketWatch)

Republicans in the U.S. House of Representatives are set to unveil a new economic proposal Thursday that will cut taxes for multinational corporations and lower other tax rates.



1) House and Senate Renew PATRIOT Act With No Modifications
National Security Letters Increasingly Used on Americans
Proposed Senate Bill Would Add Civil Liberties Protections
Senators Raise Concerns on DOJ's Interpretation of PATRIOT

1) House and Senate Renew PATRIOT Act With No Modifications

On May 26, the House and Senate renewed three controversial provisions of law related to the USA PATRIOT Act that were set to expire the next day.  The renewal was passed in the form of an amendment to an unrelated bill, S. 990, that itself temporarily extended authorities of the Small Business Administration.  Despite efforts by individual Senators to introduce modifications to the Act's intelligence authorities, the final bill simply renewed the expiring provisions until June 1, 2015 without changes.


Sat, 06/04/2011 - 12:58 | 1339302 Franken_Stein
Franken_Stein's picture


We ... , erm, ... I mean you, ... you are screwed.


Screwed I say !

Can you hear me ?!


I want you all to go to Jefferson memorial now and do something outrageously lewd and obscenely uncivil.


I want you to, wait for it, ... , dance !


Unbelievable !

Now they're even dancing in our streets !


Where will this kind of unruly behaviour lead to ?


There seems to be no ending in sight !

First they want to speak their mind, next thing you now they're dancing in the street ?!


Holy shit !

Time to call in the National Guard and bring this dancing mob under control.

Declare national emergency.

All ports and airports to be closed.


Sat, 06/04/2011 - 13:11 | 1339349 JW n FL
JW n FL's picture

I think they pulled another dance off last nite? or there is one up coming!


Hurry! call the FBI / NSA / Fatherland Security! lets shut that quiet dance down before? before.. before? before they make no noise and dont touch anyone and dont destroy anything and maybe hold hands?


our Tax Dollars at Work! Protecting US! from quiet dancers everywhere! Thank God!!

Sat, 06/04/2011 - 20:12 | 1340206 Miss Expectations
Miss Expectations's picture

Let's get ready to Rumba!

Sat, 06/04/2011 - 13:13 | 1339369 sabra1
sabra1's picture

every cop, swat team member, soldiers home address, phone number should be listed on line! how quickley things would change!

Sat, 06/04/2011 - 17:11 | 1339884 Hulk
Hulk's picture

Spot on JW!

Sat, 06/04/2011 - 18:17 | 1339993 scatterbrains
scatterbrains's picture

Amazing all those energy corp's in that top 10 list.. and more and more of their refined products are being sold outside the U.S. One day they wont even bother to sell gas to broke U.S. citizens with shitty U.S. dollars but I bet they will still recieve special tax breaks.

Sun, 06/05/2011 - 07:01 | 1340795 Urban Redneck
Urban Redneck's picture

Here's an interesting concept: When a banker in Switzerland breaks the law, he goes to jail.  You might want to try that in the US some time.

When the President of the US shit cans Wall Street's good little house nigger at the DOJ and replaces with him with someone respectable like Ralph Nader, there might actually be hope and change in the US.

Under Swiss law, the Banker-Client relationship is treated as sacrosanct as the Doctor-Patient relationship. 

The same is actually true in the US in a perverse way, since the Secretary of HHS could dictate by fiat that anyone with a terminal disease or BMI over a certain number is no longer eligible for government healthcare, in addition the Secretary of Labor could use regulatory authority to determine that the same individuals no longer meet the "Able and Available" eligibility requirement in 20CFR§604, and are therefore ineligible for unemployment benefits, since the federal government has the self-granted right to whatever data it desires about its subjects.

USA PATRIOT Act, Title II, Section 223 gives the US government blanket immunity when intentionally disclosing the personal information (financial, medical, or other) of US Citizens.  In Switzerland, negligence doesn't even excuse one from criminal punishment for disclosure of confidential information, even the management of the SNB (under Article 6 Section 49 of the Federal Act on the Swiss National Bank) is subject to criminal prosecution for violation of the right to privacy, which is both enshrined in the Swiss Federal Constitution and applied specifically to the banking industry through Article 47 Section 14 of the Federal Act on Banks and Savings Banks.

So in the US there are millions of people who suffer expenses of time and money because fat, lazy, unaccountable public employees lose laptops with the personal information of hundreds of thousands of people at a time, and yet the US government files criminal complaints alleging foreign bankers are engaging in "conspiracy" by not being as not being as fat, lazy, and unaccountable as US government employees.  Don't get me wrong Raoul Weil should have been indicted for what he did, but he was no more lazy or willfully ignorant of the law than the DOJ ass clown of a lawyer who drafted the US indictment.           

These are non-binding English translations of the relevant Swiss law.  The binding French is almost as colorless and politically correct, my German isn't good enough to comment the other official printings.

Federal Act on Banks and Savings Banks 
Article 47
1 Imprisonment of up to three years or fine will be awarded to persons who deliberately:
a. disclose a secret that is entrusted to him in his capacity as body, employee, appointee, or liquidator of a bank, as body or employee of an audit company or that he has observed in this capacity;
b. attempts to induce such an infraction of the professional secrecy.
2 Persons acting with negligence will be penalized with a fine of up to 250'000 francs.
3 In the case of a repeat within five years of the prior conviction, the fine will amount to 45 day rates at a minimum.
4 The violation of the professional secrecy also punishable after conclusion of the licensed or official responsibilities or the professional exercising duties is punishable.
5 The federal and cantonal provisions on the duty to provide evidence or on the duty to provide information to an authority remain reserved.
6 Prosecution and judgment of offences pursuant to these provisions are incumbent upon the cantons. The general provisions of the Swiss Penal Code are applicable.

Swiss Federal Constitution of 18 April 1999
In the name of Almighty God!
The Swiss People and the Cantons,
mindful of their responsibility towards creation,
resolved to renew their alliance so as to strengthen liberty, democracy, independence and peace in a spirit of solidarity and openness towards the world,
determined to live together with mutual consideration and respect for their diversity,
conscious of their common achievements and their responsibility towards future generations,
and in the knowledge that only those who use their freedom remain free, and that the strength of a people is measured by the well-being of its weakest members;
adopt the following Constitution
Article 5 Rule of law
1 All activities of the state shall be based on and limited by law.
2 State activities must be conducted in the public interest and be proportionate to the ends sought.
3 State institutions and private persons shall act in good faith.
4 The Confederation and the Cantons shall respect international law.
Article 13 Right to privacy
1 Everyone has the right to privacy in their private and family life and in their home, and in relation to their mail and telecommunications.
2 Everyone has the right to be protected against the misuse of their personal data.
Article 26 Guarantee of ownership
1 The right to own property is guaranteed.
2 The compulsory purchase of property and any restriction on ownership that is equivalent to compulsory purchase shall be compensated in full.
Article 27 Economic freedom
1 Economic freedom is guaranteed.
2 Economic freedom includes in particular the freedom to choose an occupation as well as the freedom to pursue a private economic activity.
Article 36 Restrictions on fundamental rights
1 Restrictions on fundamental rights must have a legal basis. Significant restrictions must have their basis in a federal act. The foregoing does not apply in cases of serious and immediate danger where no other course of action is possible.
2 Restrictions on fundamental rights must be justified in the public interest or for the protection of the fundamental rights of others.
3 Any restrictions on fundamental rights must be proportionate.
4 The essence of fundamental rights is sacrosanct.
Article 94 Principles of the economic system
1 The Confederation and the Cantons shall abide by the principle of economic freedom.
2 They shall safeguard the interests of the Swiss economy as a whole and, together with the private sector, shall contribute to the welfare and economic security of the population.
3 They shall endeavour to create favourable general conditions for the private sector in accordance with their responsibilities.
4 Any divergence from the principle of economic freedom, and in particular measures designed to restrain competition, shall be permitted only if they are provided for in the Federal Constitution or based on cantonal monopoly rights.
Article 97 Consumer protection
1 The Confederation shall take measures to protect consumers.
2 It shall legislate on the legal remedies available to consumer organisations. These organisations shall have the same rights under the federal legislation on unfair competition as professional and trade associations.
3 The Cantons shall provide a conciliation procedure or a simple and rapid court procedure for claims of up to a certain sum. The Federal Council shall fix this sum.

Federal Act on the Swiss National Bank
Section 6: Secrecy, exchange of information and liability
Article 49 Secrecy
1 The members of the bank bodies, the employees and agents of the National Bank shall be bound by official and professional secrecy.
2 Official and professional secrecy must be kept even after a person has ceased to be a member of a bank body or an employee of the Bank.
3 Anyone who violates official or professional secrecy shall be liable to imprisonment or a fine.
4 Anyone who discloses a secret with the written consent of his or her superior shall not be liable to prosecution.



Sat, 06/04/2011 - 12:55 | 1339304 JW n FL
JW n FL's picture

You are Family! Welcome to Fight Club!!

Sat, 06/04/2011 - 13:16 | 1339371 Yes_Questions
Yes_Questions's picture

+Garden Party Brawl.

Sat, 06/04/2011 - 12:47 | 1339290 Josh Randall
Josh Randall's picture

Mob tactics -- same thing as building up a Tomato Can boxer by having him beat hobo's and then making him even money or a big contender agaist the Champ, when you know he will get his block kocked off.

Does Don King get royalties for showing these RoboTraders how to work the suckers in a market ?

Sun, 06/05/2011 - 10:55 | 1341127 Rockfish
Rockfish's picture

Best and simplest example i've heard.

Sat, 06/04/2011 - 12:54 | 1339298 JW n FL
JW n FL's picture

In the US, the Dodd–Frank Act was perhaps surprisingly quiet on equity dark pools. But even though Congress hasn’t addressed the business practice, the SEC has taken aim.

SEC chair Mary Schapiro said in February that “the continuing growth of trading in dark pools and other types of dark venues threatens to undermine the market’s price-discovery function. Some participants may have information advantages.” In an April interview with our sibling publication Risk magazine, Schapiro said, “Hopefully, we’ll be able to turn our attention to [high-frequency trading and dark pools] over the coming months.”

Still, Merrin is confident that the SEC is a supporter of Liquidnet, and that the company will actually face less regulation than before after all is said and done.

While he has clearly got a dog in this fight, Merrin believes the SEC will go after other dark pools that have multiple flows coming in—algo flow, prop flow, retail, institutional, and so on—and which put a computer in the middle of the trading floor to match anything it can match. Those types of alternative trading systems (ATSs) are created to save on transaction costs and do not provide price improvements from what is found on the exchanges.

Merrin says the SEC will probably approve of a couple of dark pools operating in the markets, but 40 of them, and it starts to become a problem. While it’s understandable that they want to save costs, it’s ultimately viewed as not beneficial for the market, and therefore some of that flow will have to move onto the lit market for everyone’s benefit.

“The regulators in the US now understand that institutions and retail investors need very different tools,” he says. “For instance, retail needs transparency; they need the lit markets, the bids and offers. But the institutions will never put their supply and demand on the lit market; they’re not going to advertise that they want to buy a million shares for everyone to see. What we provide are tools that enable the institution to trade without that market impact, and ultimately that benefits the moms-and-pops. The SEC has recognized—and, in fact, Schapiro said it—that not all dark pools are created equal. The SEC is now saying that Liquidnet is different and it looks like there will ultimately be less regulation on Liquidnet than there was before—that’s not true of other dark pools, which are basically internalization engines.”

Sat, 06/04/2011 - 13:39 | 1339429 Yes_Questions
Yes_Questions's picture

Can't there be a class of stocks not subject to HFT that the commoner (me) could go and acquire, have a piece of paper to show for it, and the value of which would be subject to a the companies' actual performance and of course what my fellow commoners are willing to pay for it?

Then, let there be other classes of stock that are exclusively in the Dark Pools where the robots and speculators can go at it like mad?

Am I too simplistic?

Shares and the trading of same is older than computers, was it not easier to detect fraud back then?

I believe regulations can play a positive role in a number or industries, but my libertarian side tells me regulation should be hands off parts of the "market".

Oh, and +1 JW.



Sat, 06/04/2011 - 18:22 | 1340007 JW n FL
JW n FL's picture

when we dont like something we tend to paint with a broad brush (me included).


HFT does provide some benefit.


If You are JP Morgan HFT, then you are a retail gate keeper.. if you have enough buy orders stacked up.. like orders execute every 5 - 10 minutes (whihc is like a week in HFT, 10 minutes is a HUGEEEEEEEEEEEEEEEEEEEE amount of time!) so that they can be placed into dark pool ping, sounding, sniffing whatever for a deal.. then you can control how much transactional money is brought into the shop.


I could go on and on for days about how its rigged.. if you want too. if thats the way you shop is set up..


as far as seperating the two realms of dark pool and retail.. that is already the case. but its Not realy the case.. and when the SEC comes knocking but you can prove better pricing for you client (not to mention a 100% 400% improved spread for yoruself.) what can they say?


dark pools are now crossing jurisdictions.. asia opened a couple weeks back and that is not as rich (lie) as most owuld like it to be! LOL!!


dark pools are regulated.. by the same people who brought you bernie maddof! LOL!

Sat, 06/04/2011 - 12:52 | 1339301 holdbuysell
holdbuysell's picture

According to the table, did this trade lose money?

Total Cost: $40435.70

Total Proceeds: $40111.20

Am I reading this correctly?

Edit: I don't understand what the trade was for 154 sh at 102.25. How does that enter the mix?

Sat, 06/04/2011 - 12:57 | 1339322 Franken_Stein
Franken_Stein's picture


Why is there no gold & silver dark pool ?

For every shit they have a dark pool, but not for PMs ?

Where it is mostly needed ?


Sat, 06/04/2011 - 13:09 | 1339354 JW n FL
JW n FL's picture

multi juridictional dark pool ='s tax amnesty! LOL!!

Sat, 06/04/2011 - 13:05 | 1339337 firstdivision
firstdivision's picture

Tyler, without running actual calculations, visually, it looks like these trades would be at a loss. So if someone is running this algo, their aum is imploding.

Sat, 06/04/2011 - 13:09 | 1339356 holdbuysell
holdbuysell's picture

I think that's what the table is explaining.

Sat, 06/04/2011 - 13:11 | 1339338 Franken_Stein
Franken_Stein's picture


On December 1, 1955 in Montgomery, Alabama, Rosa Louise McCauley Parks, age 42, refused to obey bus driver James Blake's order that she give up her seat to make room for a white passenger.


And now you can't even dance at Jefferson Memorial without being arrested ?!

What the fuck !



Wait a minute, I rummaged around in my history book and came up with this little tidbit:


"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."


Sat, 06/04/2011 - 14:17 | 1339527 Alpha Monkey
Alpha Monkey's picture

I think it's time for an update, like instead of "all men" we go with "all people", remove the "endowed by their Creator" and insert "brought to life".  Infact, it's probably time to just rewrite the whole thing...

Sat, 06/04/2011 - 14:21 | 1339537 Stuck on Zero
Stuck on Zero's picture

A Tobin tax on trades of %0.5 would quickly eliminate 250,000 parasites.

Sat, 06/04/2011 - 14:38 | 1339572 terryfuckwit
terryfuckwit's picture

would love a bit part

Sat, 06/04/2011 - 14:40 | 1339585 Caveman93
Caveman93's picture

When will the hackers have the balls to hit the HFT Machine Bot Net Hell makers??? I hope soon. Popcorn getting stale. :(

Sat, 06/04/2011 - 14:52 | 1339617 doomandbloom
doomandbloom's picture

twas Waddel and Reed...end of story

Sat, 06/04/2011 - 14:55 | 1339627 7bit
7bit's picture

Where is the manipulation? I can't see it! It bought some stocks and then it sold them again. How is this manipulation?

Sat, 06/04/2011 - 15:36 | 1339710 hungarianboy
hungarianboy's picture

@ Cdad.

Question about those " Matched Orders"

I've recently seen matched orders in a stock here in Hungary. A stock where usual volume is about 20 million HUF a day was suddenly matched up with about 700 million in one second. The crazy thing was that the whole block of the order went from one broker to the other. Is this a matched order? And why do they do this? can we expect price to go up in the near future or so?


Sorry for the noob question

Sat, 06/04/2011 - 15:37 | 1339713 deltaneutral
deltaneutral's picture

This shit has been going on for years, just a different format.

When I was in open outcry, guys would front run all the time or jitney's would disclose stops with their pro buddies.  Lift a few offers, run up the price, trigger the stop, sell into a few hundred contracts and buy them back a minute later 5 ticks lower.


The only difference now is the human element is gone.

Sat, 06/04/2011 - 18:13 | 1339979 Godisanhftbot
Godisanhftbot's picture

 I've seen crap like this for years, but who is the sucker/suckee?


 What sense did it make for anyone to BUY this turd preferred up $10 (10%) on the day?


  The best you can infer is that some market making bot lost its cool. But I have seen many of these anomilies , so its not all that rare.

 For all you know it could be some wash trades between hedge funds.

 If all the BUYS came before the sells, then the buyer was taking a large risk that the bid would follow the spike up.


 Looks to me like some tape painting or a broken algo, and as some have asked, how was any significant money made?





Sat, 06/04/2011 - 19:42 | 1340148 Ted K
Ted K's picture

Posts like this is why I LOVE ZEROHEDGE, whatever you are doing to get this stuff in the open Tyler, and state it where people and individual investors can grasp it relatively easily, please don't stop.  It's a sad day when a blog does more to protect investors from fraud, because I guess it's the reality we have to live with since FINRA controls the SEC now.

Sat, 06/04/2011 - 19:46 | 1340161 Ted K
Ted K's picture

Mary Schapiro---go drowned yourself in a FINRA office toilet. A B-actor on the Lifetime network could convince me they care more about small investors than your circus monkey act.

Sun, 06/05/2011 - 01:37 | 1340680 The Answer Is 42
The Answer Is 42's picture

Stop fapping to the robots, Tyler. The stupid thing lost -$119k, if the shown match-up is correct, on this pathetic trade. It's a bad model, and nothing more.

The only thing that would raise any eyebrows is the many odd-lot fills.

Sun, 06/05/2011 - 05:49 | 1340772 beemasters
beemasters's picture

Good catch, ZH. (I'm not worthy)

Someone may just start a class action lawsuit against the "sleeping-on-the-job" regulators one day and find this report handy to have.

Sun, 06/05/2011 - 07:05 | 1340797 Nice day...for ...
Nice day...for the end of the world's picture

Politicians might take shots at HFT, but they would not dare touch algo trading as run by the big boys. As Cdad posted algos represent 80% of the volume. If you drive the algo trading out the volumes drop 80%, what kind of message does that send about the true state of the economy? Dow 2400 anyone?



Sun, 06/05/2011 - 09:28 | 1341011 tedstr
tedstr's picture

As a relative novice home trader I still don't get it.  Isn't this just the MM walking up the bid....not that that is a good thing...but it seems this goes on all day.  So does stop hunting.   If I set a sell at a certain ask then I guess I am happy when it gets hit.. 

It seems I see this all the time, question is how much is this really affecting the little retail guy like me?

Do NOT follow this link or you will be banned from the site!