This page has been archived and commenting is disabled.
Dear CFTC: Presenting Today's E-Mini Market Manipulating "Spoofing"
Dear CFTC commissioners:
Following yesterday's first in a long series of articles showcasing the ongoing manipulation in the S&P courtesy of E-mini spoofing, we are delighted to inform you that even though you heroically used a whistleblower's tip to capture the sole Flash Crash mastermind, Nav Sarao, five years after a flash crash which your peers at the SEC incorrectly claimed was the work of a small Kansas City-based mutual fund, the manipulation - as you called it - of the S&P 500 continues.
While we are confident you are intimately familiar with the details of the whistleblower's, pardon, your own case against Sarao, we will remind you how the FBI summarized his transgressions:
Sarao implemented a strategy to manipulate the E-Mini market. Based on my conversations with representatives of the Consulting Group, as well as my review of documents, I know that, among other activity, SARAO used a "dynamic layering" technique, placing, repeatedly modifying, and ultimately canceling multiple 200-, 250-, 300-, 400-, 500-, 550-, 600-, and 900-lot sell orders (whereas the average market size order, based on a sample analyzed by the Consulting Group, was 7 lots).
Sure enough, while a quick look at the market in the 60 minutes between 11:00 am and noon reveals that the most prevalent ES order size today (unlike yesterday) is in the single digits as it should be, what one can see quite clearly are the tens of thousands of E-mini orders placed, and then immediately canceled, made up of either ~30 or ~50 contract blocks.
And while we are confident that if Nanex can see this, so can you, here is the buy side:

And the spoofing on the sell side:
But wait, there's more.
As the following two charts show, the spoofing that has been going on in the S&P daily for years, is just as prevalent in Europe, where the EuroStoxx (ESX) is a veritable spoofer's utopia.
Here are the EuroStoxx buys in during a 140 minute block recorded earlier today courtesy of Nanex:
And sales:
Then again, we are certain that you have all this data already and are already preparing the case against the perpetrator(s): after all you are the CFTC - you know "everything" that happens in the futures market. As such we are confident you are already actively investigating the ongoing spoofing in both the US and Europe... unless of course, your interest is only awakened on days when the market drops.
That, and instead of focusing on the Virtus, the Citadels, and the KCGs of the world and their armies of predatory algorithms, you insist on finding the next manipulation mastermind in a basement in a suburb of London.
- 22586 reads
- Printer-friendly version
- Send to friend
- advertisements -





Hah! That little prick in England is still on the loose.
Fucking indians!
Oh wait, those were only buyside spoofs? Good job boys. Bottle of Bollinger.
pods
the markets are rigged.
Let me see if I get this right……
Say a contract is currently selling at 100 and I buy 1 at that price (long)
I then tell my computer to place a gazillion requests to buy at 101 and cancel said requests immediately and this will cause the price to go up. Conversely, I could short that contract at 100, have the computer place a gazillion requests to sell at 99 and cancel said requests immediately and this will cause the price to go down. The key to all of it is to get the exchange to recognize all the transactions before it executes any of them. Maybe the requests are place by an account that has no money so all the requests will fail no matter what.
And that's it? It's that simple?
Yes, now get in there and arrest those machines!
FINE those "banks".....send the banks to bank jail
WTF..
Do any of you worrying people out there think that we have anyone left in PRUDENTIAL REGULATION that has anything near the virtue of the
The Hon. Mary Schapiro - Promontory Financial Group
.or a stalwart champion of honesty like
http://en.wikipedia.org/wiki/Bart_Chilton
Give it up.
All hope is lost.
Likely the weapon of choice they employ controlling gold and silver as well
Of course, they do it with paper now.
The bankers will try to confiscate the real stuff again.
The question is whether the Tree of Liberty will flourish or wither then.
I don't know about you guys but I see a huge amount of potential to make money off *their* spoofing with limit orders positioned like high hanging hooks to capture their market bumping for a quick buck? Think it would work?
You missed the point: the little guys go to jail for making money doing this. It is called two sets of laws.
It's allowed to cancel transactions without any fee.
As a HFT firm you can pay to get better lines to the exchanges, but most exchanges already allow HFT servers inside their buildings anyways. The closer to the exchange, the better they can frontrun your orders, and everyone elses for that matter. This amounts to billions per year, lost to some seemingly invisible force.
well theres your easiest of solutions. charge to cancel
Better yet, let's get a Kickstarter campaign going to start ZHFT - our own HFT firm. We'll need access to the exchange backbone, right? Lasers too? Let's get our guys on it. Commence Op. Mayhem. Take the whole damn thing down and watch wtf happens next.
The CFTC is part of the problem.
Oh wow!
This country has really come a long way, from this:
http://en.wikipedia.org/wiki/United_States_v._Morgan
to this:
http://wallstreetonparade.com/wp-content/uploads/2015/04/US-Justice-Department-Complaint-Against-Flash-Crash-Trader.pdf
seems to me if they really wanted spoofing stopped they could disallow cancelling orders. Why is a "cancel function" even an option? Should be pretty simple, either you intend to sell or you intend to buy, there should be no middle ground which I call financial fuckery TM.
Just for that , Durden, we'll go up 200 tomorrow !
This is like when I corrected my English teacher's grammar in high school. She was a mega-bitch after that, but it was worth it.
Oh I bet you corrected her grammar reaaaaaal good.
Wow.
I have a tower just like that in my backyard, too.
..but mine has fast acting gimbels and 9 gigatwats in a focused beam only a millimeter wide.
(twats, not Watts).
I'm an expert in picking out ambiguity in poorly worded questions, at such a level that many times the teachers themselves did not understand said ambiguity since they already knew the answer they wanted. Thus only one interpretation (theirs) made any sense to them.
The best part was that they would then give me no insight into my questions as they were afraid it would be giving me an unfair hint as to what the answer was.
Eventually, I could see their mood sour during tests when I approached the desk.
I give.. Kafka?
CTFC IS the manipulator...
Why else would they remain silent?
In these scenario's, silence always indicates guilt.
So who's the HFT scapegoat gonna be???
ha. tylers trying to help.
So next action will be charging Tyler Durden in abstentia as the Real Tyler Durden could not be found. Acting on "solid information form an anonymous credible source" the Feds issued a wanted poster with a pic of Ed Norton.
(Not the one from the Honeymooners)
Hay Ralphie...
To the moon, Alice!
To the moon!
Lots of liquidity being provided... Annnd it's gone.
You mean it's not real?
lol. Epic CFTC trolling :) keep it coming
Intense... On a glance it looks like forcing a market higher while having more sells into the momentum...... which means getting higher prices while cashing out!
When does this site suddenly get an FBi symbol only as its front page!!!! thieving fuckers
The day this gets enough traction to hit Drudge, perhaps?
Edit: Well, I just did a news search, and see nothing but typical MSM propaganda. So...
never mind
You'll have to look 5 years into the future for any redemption, IMO.
Tylers did promise this as a daily feature.
Much like the Ball scores on the Sports page, in what we used to know as Newspapers.
Has a Pulitzer ever been awarded to interweb reporting?
One day in the future when we have the Nuremberg style courts for bankster criminals.
Zerohedge will be the go to evidence source
a trial is too tedious a process. the justice department said that was the reason they did not prosecute nyone on wall street.
banksters need mob justice to give them the taste of the law of rulers(the people) they thought they were.
Al, you nailed it. It is always fun trolling the banksters, sure, but this is EVIDENCE. I am filing every article in this series, in case anything 'happens' to the internet record. This is a long-forgotten Tyler Durden who I have missed.
PS: Tyler, I hope someday you are awarded the journalism prize you deserve for this, and the HFT series, and a few other out-of-the-park investigative financial articles. And I hope they have a ceremony, so you can boycott it.
More importantly, he needs to live in a country without extradition agreements with The Beast.
Maybe the CFTC will discover how Virtu only had one losing trading day in the past six years and how that is , like, impossible without cheating.
those indians are out of control! they must be stopped from manipulating the market. it is a conspiracy to take over the usa financial market and run it from bangalore.
this was a rogue trader run amoke, the "lone wolf" Der Fatherland Security has been warning our children about! Charts don't matter.
ZH poking the fraud ridden and corrupt US govt right in the eye....
The toothless CFTC is nothing but a cover for the outfits named above running hog wild.
Speaking of spoofing 'Hillary most corrupt secretary of state' http://www.presstv.ir/Detail/2015/04/23/407754/Hillary-most-corrupt-secr... and “is basing her presidential campaign on the unlimited stupidity of the American voters,” Bovard said.
Sounds like she's a shoe-in!
Oh for God's sake. Save it for the Hillary threads. Not everyone here gives a shit about the USian red-blue war criminal celebritards and their stupid campaigns; and they don't have to derail EVERY thread. This is about CFTC fail. Frankly I was enjoying a thread without the stink of sulphur on it for a change.
you know damn well they don't care what happens on up days
i see nothing. [/sgt schultz]
Dude everything is fine! They Fed's regulatory team, the SEC, and the CFTC's bands of merry assholes busted the bad guy. Move along!
Yeah but Gary Gensler is a "Wall Street Cop" who was an uber-regulator - say the MSM.
They can't go after the NY Fed and the BoE, can they?
They are the Fed.
Dear CFTC,
You've been caught with your panties hanging down around your ankles whackin your 2 inch ding-dong in front of your PC which is streaming your favorite cornholin' porn movie.
What do you have to say for yourself ?
love the site TD for the sake of what is all good and those CFTC asswipes, please please please give the names of the HFT d*ckheads giving the long hard one to all the investors out there. Lord knows they will never investigate the worthless smucks anywho!!
Our vaunted and highly paid regulators at the CFTC have got to enjoy their dirty laundry being hung out in broad daylight like this.
Hopefully every day.
HA! Good job!
Is "everyone else was doing it, and continues to do it" a valid defense against such prosecution? I don't think that would work legally, but at least it could point out the hypocrisy. Would a judge disallow the evidence and line of questioning as irrelevant?
CFTC watching too many Hollywood movies where the Brits are the popular bad guys...simpletons
OK, so Tyler, does the moscow exchange (MOEX.ME) allow this crap to go on? (I tried to look up the russian equivalent of the SEC and wikipedia gave FCSM -- see oligarchs.)
What's with the 34 / 36 contract orders?
The Law demands that we atone
When we take things that we don't own;
But leaves the lords and ladies fine
Who take things that are yours and mine...
Anonymous, circa 1764
Lovely!
There's probably some central bank contract killer looking through phone books to find a guy named Tyler Durden.
I think they outsource contract kills to the Vatican.
WRITE THE ATTORNEY GENERAL OF THE UNITED STATES!!!! I DID.
Take the 5 minutes and write an email. This is completely absurd and the there is no reason whatsoever that the Attorney Gneral should not be invesigating each and every financial institution for fraud. It is so obvious beyond belief. The ONLY way to have a 365/365 track record on trading is to cheat. All of them belong in PRISON.
Retail get back in the pool. The market is now safe and free again.
That is all.
The CFTC is useless. Much like the SEC is useless. These agencies are tools for attack for political purpose - like the kid who is now responsible for the 2010 flash crash - well done ass-clowns.
To end this quote stuffing fraud, the CME group has to make the change - they own the /es. The CME finally ended HFT last September (ICE followed in January). Not hard to do - take the HFT servers off your raised floor.
Stopping quote stuffing is more likely a software change in the router. Not exactly rocket science.
Poor Pension Funds! Who else is getting stung and is oblivious?
Such a hard on for this story, they are all criminals, if this guy is an unfair scapegoat, well, so be it
Is this gona become a daily thing, where you just tell the regulatory agencies the crimes of the day and see if they do anything about it? lol
Looking forward to Nanex and ZH update for tomorrow :)
Introduce a random 0 - .5 second delay in every trade and this would stop in not more than an hour's time.
.... "and Justice for all", except those outside "the club".
Tyler, please keep it coming till the poor schmuck is let go. This is so outrageous, something has to be done. Maybe we should start a petition or something?