It's Settled: Central Banks Trade S&P500 Futures

Tyler Durden's picture

Based on the unprecedented collapse in trading volumes of cash products over the past 6 years, one thing has become clear: retail, and increasingly, institutional investors and traders are gone, probably for ever and certainly until the Fed's market-distorting central planning ends. However, one entity appears to have taken the place of conventional equity traders: central banks.

Courtesy of an observation by Nanex's Eric Hunsader, we now know, with certainty and beyond merely speculation by tinfoil fringe blogs, that central banks around the world trade (and by "trade" we mean buy) S&P 500 futures such as the E-mini, in both futures and option form, as well as full size, and micro versions, in addition to the well-known central bank trading in Interest Rates, TSY and FX products.

In fact, central banks are such active traders, that the CME Globex has its own "Central Bank Incentive Program", designed to "incentivize" central banks to provide market liquidity, i.e., limit orders, by paying them (!) tiny rebates on every trade. Because central banks can't just print whatever money they need, apparently they need the CME to pay them to trade.


So the next time you sell some E-minis, ask yourself: is the ECB on the other side? Or the BOE? Or, perhaps, you are selling S&P 500 futures to Kuroda. Who knows: there is no paper trail anywhere, although a FOIA request and/or the discovery from a lawsuit, class action or otherwise, of the CME's central bank incentive program would likely yield some stunning results.

But the only place where "discovery" would be by far the most interesting, is for the CME to disclose just which central banks provide, or take such as at 8am every morning when one market sell order takes out the entire bid staack, the most liquidity when it comes to central bank trades in "Metals Futures Contracts (Physicals)."

Because imagine the shock and awe if and when it is uncovered that the biggest active manipulators of gold are not some junior-level traders out of Britain's criminal bank cartel, but the central banks themselves.

Finally, while the list above deals with international central banks "providing" ES liquidity, those wondering why the NY Fed is not on the list and just how the Fed's active trading team participates in the market without breaking the law, we have just one word: Citadel.

Source: Modifications to Central Bank Incentive Program. CME/CBOT/NYMEX/COMEX #14-038

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nope-1004's picture

Cuz grandma and grandpa's money is still "on the sidelines".  lol.  This is proof of the obvious fake levitation and manipulation.


Deathrips's picture

Lack of free market fundamentals is going to fuck them all up the ass...but they are trying to get grandma and grandpa first.


Pussy Ass Fuckers!!! Fuckin with Grammy?

Markets up cause dollars buy less.

MYRA next?





El Oregonian's picture

This will not end well... Trust me...

Just keep on stack'in and fergeddaboud-it....

NidStyles's picture

Nope. No conflict of interest there. Nope no way, no how

knukles's picture

Hah ha ha ha ha ha ha
I love it when a Conspiracy Theory becomes Conspiracy Fact

max2205's picture

Selling to a senator or CONgress person too.

NoDebt's picture

We all knew it was happening, but when faced with proof I still find myself a little stunned.

I am rarely stunned by the truth.

At lseast given the dates on this offering, we're good through the end of the year.  As for the start date... July 2013... why does that ring a bell?

And, of course, now we know why the Fed is routing though Belgium and God knows where else.  Only foreign central banks can participate.  So had the money to Belgium and have them do it for you.

Among the many questions I have, probably the first one to mind is this:  How long has this been going on?  Surely July 2013 is not the first time such a program has been offered.  As for the end date, we all know when that will be: never.

rehypothecator's picture

Central banks need incentives, like $1 commissions, but retail investors do not.  Because without the incentives, central banks wouldn't buy trillions of dollars of S&P.  But retail investors would.

AlaricBalth's picture

Did we seriously think that Kevin Henry of the FRBNY sat around all day watching porn?
The man is working those markets!!!!

SMG's picture

Well there's another conspiracy "theory"  proven as actual conspiracy fact.

Isn't this all illegal? 

Squid-puppets a-go-go's picture

well, govt make dem rules

what it is, however, is nationalisation by stealth

ask any politician in public if nationalisation is the solution and theyd scream 'EVIL COMMUNISM!!!'

Majestic12's picture

"what it is, however, is nationalisation by stealth"

Please tell me this is sarc?  Your spelling is UK, so it is possible you are intimating that everyone here is a redneck, staunch anti-communist....

However, the UK thrives on a steady diet of Head Cheese, Blood Sausage and Sheep's, you are statistically most likely a pig-fucking, pedophile, tranny who works in an "abattoir"....

Central banks are "private", thus making these actions "privitiZation"...of "public" tax monies.....the gains, anyway.....

Tabarnaque's picture

They are still lying. They forgot to put commodity futures and gold and silver on their list... Bastards.

Bohm Squad's picture

re:  Gold and Silver...I thought we were talking about things they were buying?

Tabarnaque's picture

If you look at the official document they mention: incentive to "trade" the following items. In my book you can trade either on the long or short side... ;-)

Wait What's picture

like they're ever going to ruin the game by selling short?
recall what happens when SHTF: 'short bans'
the narrative can only be maintained if prices keep going UP.
as a bonus, their losses never have to see daylight, because they're obviously not accountable to anyone.
the greatest ponzi scheme humanity has ever seen

Drunk In Church's picture

The market has reached its peak.  But this isn't good news for the gold bugs.  Precious metals will end up taking a beating.

GetZeeGold's picture


My mattress stuffed full of Zimbabwe bucks is all I need to get me through the tough times ahead.


Got a couple Benjis in there as well.....just in case.

Manthong's picture

Does Kevin lift green boxes that have a West Point band around them?

We need to fill them with lead and make him do that 'till he drops.

Raymond K Hessel's picture




It's "incent", not "incentivize".  As in it's "regardless" not "irregardless"

scraping_by's picture

Not a peak, really. A peak is sharp, and has a down slope. This is a plateau. As far as the eye can see.

Squid-puppets a-go-go's picture

nar, no sarc - if it is govt policy to buy stocks , it does constitute a peicemeal/clandestine nationalization.

i take your point in the case of the Fed being private and only pretending to be .gov. Other central banks around the world are, however an extension of govt. But given it all gets funnelled to the oligarchy one way or another so my point is kinda moot

Weisshaupt's picture

You own a printing press. You print money and give it to your friends.  You do so with full support of law and government. Bribes are paid to politicians to continue the charade.

Does that not make the government complicit in the crime?  Can not the government at any time extort whatever it wants from those actually engaging in the farce?

Follow the money. Big government MEANS Big Corruption and cronyism. It means Economic Fascism. And it will happen every time because of human nature.

All forms of leftism are fundamentally the  same-  Socialism, Communism, fascism ( Crony Capitalism)  - the only differences between them is the lie they tell to justify using government force to uphold the theft of property and enslavement  of those who actually produce value.

When the left complains about "private parties" benefiting from these arrangements - they are only complaining about the size of their cut - feeling that the average non-contributing zero deserves a bigger cut of the criminal enterprise  for voting for the criminals in govt  than the crime bosses working for the government. At no point are they actually suggesting that such corruption shouldn't continue.  If it did stop then they would have to survive by providing value to others in a mutal and VOLUNTARY exchange, and that  would mean that they starve.


JRobby's picture

Isn't this all illegal?

Thanks, still laughing my ass off. Nice to laugh on a "banking holiday"

TheReplacement's picture

How long until the CBs own everything is one follow up question.  Another, maybe more or less important depending on the first answer, is are the CBs trying to buy everything?  As to why, I think we can all figure out why they would.

Ginsengbull's picture



Don't they already own enough?


Or do they want to own, buy, and sell us too?

Nick Jihad's picture

why would they ever need to sell?

SAT 800's picture

That;s so sick. That's a real ice bucket challenge. I feel like I got hit in the head with a dead fish. What the fuck do these jerk offs think they're doing. Liquidity, my ass.

JamesBond's picture

You can't control it all unless you control it all.



Tall Tom's picture

At 7:07 AM PST I checked the prices of Gold, Silver and Platinum, on Kitco, as they are trading on the London Market. (US Markets are closed due to Labor Day.


All of the Metals were at the price which they had opened. NO CHANGE in price.


What are the odds that it happened randomly? (Silver is trading at 1/10,000th of a cent.)


They are not even trying to hide this anymore.

herohedge's picture

This will not end well... Trust me...

It would be nice if prices became halfway sane again. We only see good companies with dividend yields greater than 1.5% during market meltdowns.

Also, I think we should expose the holdings so that people of all the countries can get their fair distribution of equity ownership and usher in the Marxism dream. (yeah right)

Majestic12's picture

"Pussy Ass Fuckers!!! Fuckin with Grammy?"

Putting the words "pussy"..."ass" ....and ....."Grammy" al together in one sentence is gonna make me puke....and probably many others too....

Bangin7GramRocks's picture

There are plenty of really fuckable 40-50 year old grannies. Free your mind and your ass will follow. 

TheReplacement's picture

That makes me feel so sad for you.

scraping_by's picture

"They don't yell; they don't tell; they don't swell; and they're grateful as hell."

bonderøven-farm ass's picture

I think gram'ma is running out of orifices for the Fed to profane....

Ginsengbull's picture

Do not google that combination of words.

Nick Jihad's picture

Sigh. Now instead of ads for, it's back to CougarLife ads. Thanks a bunch.

angel_of_joy's picture

It's the same circle jerk that was always functioning in FOREX, except now it applies to stocks. Big fucking surprise... not !

We are already at the point where we can speak of "free markets" as a theoretical concept only, and at past tense...

Next step: free speech !

Kaiser Sousa's picture

cnbc will be all over this....

Fred Hayek's picture

Yes, on their Bizarro world broadcast.

remain calm's picture

When CNBC can no longer hide from the truth, Liesman will actually explain to all us dumb fucks how this is good for the markets. The sooner people like him are destroyed the sooner the the rebirth can happen.

SAT 800's picture

All major banks have always been the market makers in Forex; that's natural, money is there business. But buying and selling metals contracts, and S&P500 contracts by Central Banks, UGH ! That;s not natural, that's sick.

New_Meat's picture

THIS! is settled science.

Kirk2NCC1701's picture

Whaddya mean they are "Trading S & P Futures"?

I thought they were "Trading OUR Futures".

JRobby's picture

They were done with that 40 years ago

RiverRoad's picture

What happens when they all run for the exits?