HFT Quote Stuffing Market Manipulation Caught In The Act

Tyler Durden's picture

Now that we can directly monitor the amount of quote stuffing in the NYSE courtesy of Nanex (an ability that the SEC apparently never will have), we know that every time there is a massive spike in hollow trade (as in without intentions to cross bids or asks, something everyone but the SEC and the HFT lobby believes should be a felony offense), the market is programmed to either rip of plunge. Sure enough, at just after 3:19 pm we saw an epic spike in empty packets on the NYSE, which set off red flags and immediately prompted us to observe the move in ES, which naturally confirmed that an HFT driven coordinated buy order (no block) was going through and pushing the ES well on its way to VWAP. Market manipulation no longer needs anything more than a coordinated packet stuffing dump, as what happened on May 19. Keep in mind: these work on both the upside and the downside- the reason why suddenly everyone hates HFT after loving it for over 2 years, is that while it provides volumeless levitation, it just as easily can serve as quicksand in a downmarket. That, however, does not make it right, and just as two years ago, when we first brought attention to the matter, so today, we claim that HFT should be abolished immediately by the imposition of a minimum active quote latency. That would eliminate all quote stuffing and HFT market manipulation in a millisecond.

HFT quote stuffing spike:

and ES response:

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MarkTwainsMustache's picture

As per the WSJ, the SEC is too busy looking into Hydraulic Fracking to worry about such things as 'market integrity'

bankrupt JPM buy silver's picture

Ahhhh yes, the good ol'days where we would put in orders and have to wait 5 minutes to cancel them...try teaching that to the 19 year old algo engineer

InconvenientCounterParty's picture

Organize a mass, coordinated onslaught of buy and sell limit orders that are 20%+ off the last tick.

we'll call it "420"!

oh. I see. Apparently that's been taken. How about "666"?

Mactheknife's picture

And there you have it..100 successful "trading" days in a row.

JenB's picture

Seriously..... Everyone knows this is going on and you are absolutely right, it should be a felony offence! Surely there is a way to lobby against this!

MarketTruth's picture

Hi, I work for the SEC. Sorry, was looking at porn on the Internet and missed seeing this move.

A.W.E.S.O.M.-O 4000's picture

Dude, looking at porn would be an improvement to what they have been doing since at least 1993;


Rolling Stone Magazine Matt Taibbi article link:
Chasecran's picture

I was wondering if y'all caught that.  It was a wild move.

oogs66's picture

I hope algo's bought Bac at 8.80 this morning - flash ramp seems totally allowed?

SheepDog-One's picture

Without HFT, ZIRP, and the FED's invisible iron fist, we'd have a DOW of about 1,500 or so.

baby_BLYTHE's picture

at least (True Value).

I just think the Money Printer will step in before we ever retouch the previous lows of March 2009, even though I don't expect QE 3 to come for at least another 6 months or so.

DeadFred's picture

You're assuming they will retain some moderate amount of control. How good is that assumption? What if they don't? For the last month I've been throwing out a number of small 'crash bets' aimed at making money when and if the market totally tanks. With the HFT issues I'm guessing that there is a significant chance we will see a stop trading day sometime this year. Mostly I assume it 1-200 bucks I'll never see again, but a couple of those trades during the post debt ceiling free fall were good enough to let me keep doing this all year long. My point is that I think there is a real chance the market manipulators will completely lose control for a period of time and promises of free money won't be enough. (For what it's worth I have a crash bet for tomorrow, in case Uncle Benny disappoints, 2 NDX weeklies at 1950, $100 total)

TruthInSunshine's picture

SheepDog-One  Thu, 08/25/2011 - 15:43 |


Without HFT, ZIRP, and the FED's invisible iron fist, we'd have a DOW of about 1,500 or so.


I think we're turning Japanese, I think we're turning Japanese, I really think so.


1989 - Nikkei =39,xxx

2011 - Nikkei = about nothing


21 years of devasting NOMINAL declines, and even MORE MASSIVE real ones.

JSD's picture

As long as VZW strikers, I mean workers get their due...this really isn't a problem.

FunkyMonkeyBoy's picture

SEC = just another tenticle on the criminal beast that owns you and your children... and will own your children's children also.

Is it time to get angry yet? Or does Obumma need to personally come around your house and take a dump on your wife's face?

SheepDog-One's picture

Im just concentrating on getting away from this head on train wreck that everyones on and thinks will end ok. Screw all this, let the sheeple go down.

BTW most americans seemingly would be only too excited to have the honor of Obama coming over and taking a dump on their face.

Dr. Richard Head's picture

An Obama Steamer.  Finally someone to take that moniker away from Cleveland.

By the way, how much water would you recomend to have on hand for a family of four?

SheepDog-One's picture

I have a well, and also a couple Katadyn expedition water filters. Water is too damn heavy.

Waterfallsparkles's picture

My well does not work without electricty.  Yours does?

JohnG's picture

1 gallon / day / person should do it.  Or a well, lake, stream, spring......

mynhair's picture

Use JohnG's amount, and 5 days worth, at least.  Was out for 9 days after Charley on electric.  Thank god for showers on bots.

Waterfallsparkles's picture

I live on bottled water as the wells in my area are not good.  You need at least 2 to 3 gallons a day for a family of 4.  Remember that you will need bottled water for cooking rice, noodles, cooking vegtables, hard boiling eggs, coffee, making iced tea, just regular drinking, water for pets. You may also want water to take sponge baths.  Also, do not forget you may need water to clean plates and pans, etc. You would be amazed how much bottled water you need when the spigot is turned off.

Rememer to fill lots of jugs of water for flushing your toilet also.  Where I live the well does not work without electricity.  So, keep about 6, 2 gallon jugs of water just to flush your toilet.  Do not pour the water in the tank, just in the bowl.  Works better.

I have been without electricity for at least 4 days and it is a bummer.  Without running water or the ability to flush your toilet it gets a little harry to say the least.  Be prepaired.

Dick Darlington's picture

How much midget porn you have to watch in order to miss this and do nothing? Good job SEC!

fuu's picture

They are all too busy cruising ZH with their topless avatars.

GoinFawr's picture

and some people say they don't really provide any public service whatsoever.

Cdad's picture

Maybe, if Mary Schapiro could just halt her year long meetings with criminal syndicate Wall Street bankers about what SEC laws they prefer her to ignore and which ones are ok to enforce, maybe Mary Schapiro could drop by Nanex and get a fucking clue as to what is going on in this Pachinko market.  Free market capitalism, Mary?

Holding my breath...

SheepDog-One's picture

Just waiting for the stress to snap the Titanic keel, then it all plunges down quick. Not hoping for the pirates to come clean here....this crap has gone on way too long man.

Cdad's picture


Check the sheer f'n stupidity on P after hours.  What kind of fluoride eating morons are at the helm of the algo ship?

SheepDog-One's picture

I hate it all, the tide has gone out a mile and everyone is partying on the beach...even dumb ox head for the hills when the tide goes out a mile Im clearing out of here.

Vendetta's picture

Built like the Titanic, go down like the Edmund Fitzgerald

SheepDog-One's picture

So whats with this last little market dip before todays close, the go-ahead ticket for Bernank tomorrow? 

Racer's picture

They rather ban the evil shorters first though

MoneyWise's picture

Those f*ks ripping-off US Markets now, while EZ closed at higher note, after initial dump.

1) Reinstate f* Uptick rule and

2) charge 5c-10c for each extra quote over (50 in 1 min), done deal.

Everyone is just talking and nobody doing anything about it.

FTC/SEC probably getting some bonuses of those criminals

while loading up Porno on .GOV computers..

SheepDog-One's picture

Every market trade must be executed with a CAPTCHA answer....all problems solved immediately. 

Nah thats too easy though, and people wouldnt get paid for looking the other way while surfing midget porn.

fwchiro's picture

On a slightly different note, am I the only one that feels CAPTCHA is trying to communicate with me?

SheepDog-One's picture

Yea I get some weird CAPTCHAS sometimes. I got one that said 'blOwBoY' the other day....WTF is THAT supposed to mean??

jwfxfox11's picture

Did anyone else see Schwab is suing Citi and BofA for LIBOR manipulation?

MoneyWise's picture

And we have no one out there, everybody on f* vacation

EZ and US included, while everything falling a part.. f* that!!!

Those crooks should be behind bars instead, until they figure out

the solution. Hussein Barobama playing Golf, why should he care.

FoieGras's picture

17k ES in 60 seconds is "volume less"?

Couldn't be that the ES spike caused the qoutes to go wild, could it? No.. the only allowed explanation is that quote stuffing caused ES to spike! Vice versa is just unthinkable.


d00daa's picture

you can't be serious with this nonsense.  "es spike caused the quotes to go wild" - LMFAOLOLOLOL are you fucking kidding me?  does the sec pay you by the post?

vast-dom's picture

I'm setting up an HFT ETF. All 0H members can get in on it before I go public at insider discount. 

OuaisBla's picture

In engeenering, we say " if it is not broken, dont' fix it".

Texas Ginslinger's picture

Harry Markopolos quote (numerous times he told the SEC Bernie Madoff was gaming the system, and nothing was done)

"If you flew the entire SEC staff to Boston, and sat them in Fenway Park, they wouldn't be able to find first base."

The corruption is apparently everywhere. if nothing is done.

Keep reporting this, Tyler.

zorba THE GREEK's picture

Harry drew the SEC a f#*king map. He told them to go to madoff trading desk and ask to see trades, there weren't any. Ponzi exposed.

What a waste paying the SEC billions to do ZIP.