Crude Oil Prices Are Spiking (Again)

Because - everything is awesome again. So the machines run the stops for the week but fail to hit $47, and no news, no catalyst, but naturally stocks decide to inch higher on this latest algorithmic idiocy.

 

 

Here's the close-up into the NYMEX close.. and drop...

 

And here's why... and how - this happened, and has happened so many times before, courtesy of your friendly, stop-hunting neighborhood algo:

...In early 2007, Defendants Optiver US, LLC ("Optiver"), Optiver Holding BV C'"Optiver Holding"), and Optiver VOF C'Optiver VOF") - the U.S. and Netherlards branches of a global proprietary trading fund headquartered in the Netherlands - developed and, in March 2007, implemented a scheme to manipulate the price of futures contracts in Light Sweet Crude Oil, New York Harbor Heating Oil, and New York Harbor Gasoline on the New York Mercantile Exchange ('"NYMEX").

 

... least 19 separate instances during the month of March 2007, Optiver, Optiver Holding, and Optiver VOF, led by head traders, Defendant Chrstopher Dowson C'Dowson") and Defendant Randal Meijer ('"Meijer"), repeatedly attempted to manipulate market prices - or in Dowson's own words, "'bully the market" - for the above-referenced energy futures contracts towards the end of the trading day.

 

... On at least five of the nineteen instances, Defendants succeeded in their manipulative scheme by causing artificial prices in certain of these energy futures contracts, resulting in serious harm to other market participants and, ultimately, to the public at large

 

...defendants developed a scheme by which Optiver, having accumulated a large net TAS (defined below) position, traded a significant volume of futures contracts in the opposite direction, before and during the Close, with the goal to improperly influence and affect the price of futures contracts in Crude Oil, Heating Oil, and New York Harbor Gasoline

 

...defendants' strategy was to execute approximately 20-30% of Optiver's futures trades just before the Close and the remainder during the Close.

The full filing busting just one of the countless more HFT "banging the close" operations is below.