Limbaugh Predicts Economic Collapse If Obama Wins

[VMI77]

Another example: http://market-ticker.org/akcs-www?post=212496

A "Mysterious" Trading Robot?

A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4 percent of all quote traffic in the U.S. stock market last week, according to the top tracker of high-frequency trading activity. The motive of the algorithm is still unclear.

Oh really? The motive is unclear eh?

No it's not.

The motive is to try to goad someone else into placing an order against the fake orders that are never intended to execute. This, incidentally, is illegal -- the Securities Act makes unlawful any action taken in the market with the intent to distort prices. In other words the placement of any order into the market for any purpose other than to have it executed is against the law.

[bizarrenormality]

I doubt an exchange allows anonymous trades so that "single mysterious computer program" should be easy for the exchange to identify if the story is true.

[VMI77]

I doubt an exchange allows anonymous trades so that "single mysterious computer program" should be easy for the exchange to identify if the story is true.

From a previous posting up the thread:

Dark Pool:

In finance, dark pools of liquidity (also referred to as dark liquidity or simply dark pools) is trading volume or liquidity that is not openly available to the public.[1] The bulk of these represent large trades by financial institutions that are offered away from public exchanges so that trades are anonymous. The fragmentation of financial trading venues and electronic trading has allowed dark pools to be created, and they are normally accessed through crossing networks or directly between market participants.

https://en.wikipedia.org/wiki/Dark_liquidity

and this:

http://www.cnbc.com/id/49333454

A single mysterious computer program that placed orders — and then subsequently canceled them — made up 4 percent of all quote traffic in the U.S. stock market last week, according to the top tracker of high-frequency trading activity. The motive of the algorithm is still unclear.

The program placed orders in 25-millisecond bursts involving about 500 stocks, according to Nanex, a market data firm. The algorithm never executed a single trade, and it abruptly ended at about 10:30 a.m. ET Friday.

“Just goes to show you how just one person can have such an outsized impact on the market,” said Eric Hunsader, head of Nanex and the No. 1 detector of trading anomalies watching Wall Street today. “Exchanges are just not monitoring it.”

Translation: The ultimate goal of many of these programs is to gum up the system so it slows down the quote feed to others and allows the computer traders (with their co-located servers at the exchanges) to gain a money-making arbitrage opportunity.

Add these things together: 1) anonymous trades; 2) no monitoring by the exchange; and 3) programs being used to scam the market, and the obvious conclusion is that the market is crooked, since these activities are known and could be stopped, but aren't.

[recaffeination]

Something doesn't add up. If it's anonymous how does the seller know where to send the stock and how does the buyer know where to send the money?

It could be private, with the principal's identify kept confidential by their agent, but there's a big difference between confidentiality and oh noes! anonimity.