Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today

Tyler Durden's picture

Dear CFTC:

Thank you!

Thank you, because 6 years after we warned about the dangers from predatory HFT including such parasitic "strategies" as spoofing (or layering, which together with the DOJ you have now confirmed is illegal), quote stuffing, flash trades, momentum ignition, sub-pennying, ISOs, and countless others, you have confirmed everything we have said.

So we have decided to return the favor.

Just because we know how serious you are in your quest to root out all market rigging, or as you put it in your charge against Navinder Sarao "manipulation or attempt to manipulate the price of the intra-day contract price for the near month of the E-mini S&P," we have decided together with Nanex to once again give you a helping hand, and point out all the spoofing that has taken place in the E-mini or ES.

Just today.

The chart below shows a contract count of just the buy orders added/canceled/executed in the 1 hour interval between 11 and 12pm in the ES:


And here are the "sales":

To remind you, this is what irritated you in the Sarao document:

... Defendants used the Layering Algorithm to place hundreds of orders for tens of thousands of contracts that were modified thousands of times and eventually canceled over 99% without ever resulting in a trade.

As you can see the vast, vast majority of ES contracts just before lunch today was cancelled without ever resulting in a single trade.

And, we are confident, since Mr. Sarao is currently either in custody or on bail, without access to the internet, one can't blame today's massive E-mini spoofing on the flash crashing mastermind.

Since we are confident you intend to root out this evil market scourge at the root, we are also providing you with examples of spoofing in oil, in US Treasurys, and in gold.

Finally, since like you we are confident the investing public's faith in the broken market must be restored at all costs, we will make this article into a daily feature showing every single day the hundreds of thousands of spoofed ES contracts, openly "manipulating" (in your own words), the so-called market.

We will stop once you, dear CFTC, have rooted out all the spoofing, all the momentum ignition, all the sub-pennying, all the quote stuffing. In short - the endless manipulation.

Now, go get 'em!

P.S. if you are unsure who the spoofer is, call us - we will be delighted to tell you: we don't even want the whistleblower award.

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ZH Snob's picture

I'm sure they appreciate the help, Tyler.

bania's picture

That's a lot of folks with trading terminals living in their mothers' basements.

101 years and counting's picture

they're just doing god's work, afterall.  that guy in britain should be given a nobel peace prize.

Ruffmuff's picture

I thought the CME was getting involved and spoofing was down.

It must of been notable if in the DOM on ES.  Sometimes it all looks like spoof daddy or spoof doggie going at it.

Probably a box owned by the fed named the bernanke ballbuster 1000. What the hell good is manipulation without fucking with people, too.

ParkAveFlasher's picture

Time to pull everyone's favorite platinum-coiffed surrender monkey out of retirement to issue a shrugging apology.  Paging Bart Chilton, bitchez!

NotApplicable's picture

So much so that I'm sure they're building a conspiracy case against ZH AND Nanex right this second.

McMolotov's picture

No one should believe any of this. ZH is a fringe conspiracy blog and can't be trusted. I'll wait for Steve Liesman to explain in short, monosyllabic phrases what's really going on.

Wait What's picture

watch out for nail guns, Tylers.

it's only ok when they do it, not yous...

Eireann go Brach's picture

We blamed some folks!

Chewbaca, where's my meatloaf? Joe and Flavor Flav are coming over for lunch!

raywolf's picture

make next friday, spoof the ES day.... let's all add huge contracts 2-3 points above the bid and cancel them...

BuddyEffed's picture

Raywolf -- That's borderline consipracy and wire fraud all wrapped in one!   Don't be suprised is someone soon also feels you out about joining ISIS and if you want help from other like minded individuals in  your/their project.

anonnn's picture

Dear Tyler et al,

Please collect these HFT/spoofing/Manip/SEC scapegoat posts for Navinder Sarao's defense team. 

The defense may well be in need of the ZH blog views as direction-finders for real and demonstrated evidence.

A treasure of benefit for the 99%.

Wait What's picture

are you trying to get ZH shut down?

obviously it will have to take the wikileaks/piratebay route to disclosure, eventually, but let us enjoy it a little longer.

NoDebt's picture

Wait, wait, wait.  This isn't possible.  They caught the guy already.  Did he make bail already or something?

Not_FieldingMellish's picture
Not_FieldingMellish (not verified) NoDebt Apr 22, 2015 1:30 PM

Its his brother.

centerline's picture

They forgot to turn off his computer.

stewie's picture

He's using Morse code to signal to a paid prison guard what to do ... real-time.

A Nanny Moose's picture

Greetings. Professor Falken.

SmedleyButlersGhost's picture

It could have been me today. I don't know anthing about trading but when my porn site stalled - I just starting hitting buttons without knowing what I was doing.  So if it was me, please accept my apology.  If my Mom finds out - could be strike 3 on this sweet basement pad.  Then I'll have to take my degree in Critical Analysis of Communication Modalities and get a job

Bastiat's picture

He must have: clearly he is the sole embodiment of all HFT evil.

booboo's picture

This case should be a cake walk for Sarao to win. A good attorney will bring in a terminal and the jury can watch the spoofing in real time.

Bastiat's picture

As long as he can avoid Tsarnev's attorney who must have been inspired by the movie "Idiocracy."

here it is:

Squid Viscous's picture

must be another darkie in mom's basement with his Dell laptop

SMG's picture

Zero Hedge truly is awsome sometimes.  Great Article.

raki_d's picture

yes it is. I wish I cd give this article 100 frikking stars haha ! ZH /Tyler at their Best !
btw however those other 'hinderberg omen' type daily articles last 4 / 5 years kinda taking away ZH credit IMO... 

gswifty's picture

I especially like the threat of ZH publishing the manipulation daily. This promises to be better than taco Tuesday. Let's see how long they can be ignored.

Racer's picture

Keep it up TD, well done!

KnuckleDragger-X's picture

Put a forced 10 second delay in withdrawal of buy/sell orders. After all, what could be more fair.....

Urban Redneck's picture

Tax it -- $.01 tax stamp required to place an order for listed security on an exchange, and $.02 to modify an existing order.

It will either solve the problem or pay off national debt immediately. 

Ward cleaver's picture

Now do u think the regulators would allow such a common sense approach? What would be left of this "market" if this type of cheating was stopped? Think of all the poor millionaire millenials that have just put a down payment on a 4th vacation home. Where is your humanity sir?

Urban Redneck's picture

Heads I win, Tails the Banksters lose.


The regulators would do it, if the purchased politicians were replaced (either at unrigged ballot boxes by an informed electorate, or at a guillotine), as the shit get worse the odds do improve ever so slightly...

Hype Alert's picture

What I'd like to know is how somebody gets to place millions of $$ in orders unless he has it in his account to complete the order?  Funny, mine doesn't work that way.


Besides, isn't what they are charging him with the definition of the HFT firms?

rubearish10's picture

Yeah and Lloyd's really shitting his pants abnout this right now. FTW

davidalan1's picture

ZH,  doing Gods work...

Unknown Poster's picture

Somebody is going to get audited, not Citadel or Virtu.

buzzy_the_pirate_dog's picture

Stop with all the facts.

Ward cleaver's picture

"Stop Making Sense". Oh how I long for the Louis Rukyser days. IBM bid 50 1/4, ask 50 3/8ths. OK I'll buy 100 shares.

i_call_you_my_base's picture

CFTC: One of the most corrupt organizations ever created by man.

29.5 hours's picture



Yes--except for all the other imperially corrupt American regulatory agencies.

City_Of_Champyinz's picture

Nah, the NFA is 1000Xs worse, and they are incompetent as well to boot...

toothpicker's picture

CFTC: One of the most corrupt organizations ever created by lizards

pods's picture

This poor guy is like a single rat being blamed for the Black Plague while all the other rats and fleas go about their business.


asteroids's picture

OK, tell us who today's spoofers are, curious minds want to know.

NotApplicable's picture

Well, the two that matter are Citadel and Virtu.