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Regarding CQG, the answer is clearly no. This screenshot was taken a month after the event and clearly shows a resting order sitting at +0.01 and a rejected order at -0.01.
Can you help answer these questions from other members on NexusFi?
For those interested in digging a little deeper to understand some of the FCM's responsibilities regarding risk management under the CEA and it's regulations, you may find this an interesting read. There are many aspects to the RMP (Risk Management Program) some such elements are the following ...
"(J) Policies and procedures for assessing the liquidity, marketability and mark-to-market valuation of all securities or other non-cash assets held as segregated funds, including permitted investments under § 1.25, to ensure that all non-cash assets held in the customer segregated accounts, both customer-owned securities and investments in accordance with § 1.25, are readily marketable and highly liquid. Such policies and procedures must require daily measurement of liquidity needs with respect to customers; assessment of procedures to liquidate all non-cash collateral in a timely manner and without significant effect on price; and application of appropriate collateral haircuts that accurately reflect market and credit risk."
***note this includes both funds as defined under §1.25 and also includes customer-owned securities***
"(ii) Operational risk. The Risk Management Program shall include automated financial risk management controls reasonably designed to prevent the placing of erroneous orders, including those that exceed pre-set capital, credit, or volume thresholds. The Risk Management Program shall ensure that the use of automated trading programs is subject to policies and procedures governing the use, supervision, maintenance, testing, and inspection of such programs."
***note the term "shall" means mandatory ***
"(ii) The Risk Management Program shall take into account risks posed by affiliates, all lines of business of the futures commission merchant, and all other trading activity engaged in by the futures commission merchant. The Risk Management Program shall be integrated into risk management at the consolidated entity level."
***note the inclusion of the term 'affiliates' ***
You're showing us a picture of DEMO?
Since you are the original poster of this case, are you one of the claimants?
If yes, please post the explanation you received from AMP so we can see, because right now we are discussing this blindly, making wild guesses.
There are many cases pending class approval right now including TD, Etrade, Vega Capital plus a plethora of ETF/ETN's such as USO, SCO etc. I'm interested in all of them. I find it a fascinating set of events that unfolded and I have many opinions on almost every case including this one. I also have many facts and opinions on CME's and CFTC's role in this. I also have many opinions on the statements made in this thread so far. My opinion doesn't matter though.
My intention for starting the thread was nothing more than to provide facts, although I may toss in the occasional opinion. All I've done here, so far is state facts. I'm not trolling for attention or to keep anyone guessing. I have no idea where that suggestion even came from. If you don't believe that the facts I'm presenting have value, it is your right to state your opinion or provide facts to the contrary. This is basically how the court of law works. This suit along with all the others I've read so far are seeking jury trial, so ask yourself what will the jury think? Also ask yourself what the burden of proof is, after all this isn't a murder case so the burden isn't beyond a reasonable shadow of doubt. And who knows what other proof there is, full evidence disclosure is not part of the class approval process.
It's all good as far as I'm concerned. However this line of questioning does lead me to the following question...where is the proof TT was able to process negative orders and the back office systems were compatible and all that good stuff? Is it entirely possible they had a data stream but did anyone actually try and place an order through TT at a negative price? Do people realize the difference? These are all good questions! How come you didn't bring that into question since it's only been in statement form, where are those pics?
Next I'm waiting for someone to suggest the pic I posted was photo shopped.
That image shows besides being on demo, shows you getting an exchange reject, which means (had it been live) the order would have had to go to the exchange and likely got bounced because it was 30ish points out of market.
Maybe @SMCJB can comment on the specific exchange price banding behavior in CL.
wrt to TT, I have no proof that people traded through TT at negative prices in cl that day, but I trade using TT at negative prices every day, and I'd be willing to bet that Vega Capital was almost certainly using TT. Most ISV's that connect directly to the exchange (TT, CQG, CTS, Rithmic) set what products can trade negative based on security definitions that are programmatically retrieved from the exchange and you almost need to go out of your way to handle it incorrectly, so I'd assume most handled it correctly unless there's evidence to say otherwise.
IB was different in this respect as they were both the FCM and the software vendor, the buck stops with them. AMP is just the FCM, and while I think its unprofessional that they hadn't vetted the software they had traders using, I don't think it's going to be their liability.
Do I understand you correctly? Are you alleging that TT and CQG some how fake their streaming data during negative prices and did not route orders to the exchange ?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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@RT777 I like you find subjects like this very interesting, and how all the law suits evolve will be very interesting. Your referencing of the CEA was very interesting. Also what actually did happen on the April 20th? (more on that in a minute). In this thread I have definitely taken a little bit of the "devil advocates' approach. While I do not think people like AMP are blameless, allegations like "they never warned me it could go negative" are in my opinion frivolous. I also agree with @Big Mike that people should be aware about this issues and learn from them. There are too many people though that are delusional and immediately blame everything on somebody else. Another 'truth' thread mentioned in this thread being an obvious example, but that's getting off topic.
With regards to TT, as @addchild said negative prices are nothing new in the energy industry. Power prices go negative regularly, gas prices less regularly. TT has been able to handle this for 20 years. Many of the products that do trade negatively are only available on ICE, and TT has been one of the only ISV's for the ICE Natural Gas and Power markets so maybe thats why they handle it so much better. (Power prices go negative because it costs more to shut a generating unit down and to restart it than it does to run at minimum load and sell output at negative prices. Gas prices go negative because you can only flare so much natural gas. Once you reach that cap, and have no transport, you have to pay somebody to take it from you. Who will then probably flare gas they were intending to Transport).
With regards to CL price banding, maybe embarrassing to admit but the simple answer is I don't know. I know what they are, and how they work, but don't track them. Banding only really effects the prompt few months and I'm a curve trader so it rarely if ever effects me.
With regards to April 20th I would point you towards these two posts in another thread.
While the Bloomberg story may seem like 'Breaking News' it's actually not. They ran a similar story 4 months ago, it's just now more details have been filled in.
This is where it gets interesting and where the CFTC report is very lacking. If they did buy massive amounts of TAS and then intentionally and continually sold lowering the price as it went into settlement isn't that the textbook definition of “Banging the Close”. (Yeah I know it's been done for as long as exchanges have existed but it's clearly illegal now).
From the CFTC website
Banging the Close: A manipulative or disruptive trading practice whereby a trader buys or sells a large number of futures contracts during the closing period of a futures contract (that is, the period during which the futures settlement price is determined) in order to benefit an even larger position in an option, swap, or other derivative that is cash settled based on the futures settlement price on that day.
Question is, even if the CFTC does or doesn't go after them, will all the people who lost money that day now sue them/'The Essex Boys"?
* For the non-English, Essex is the county east of London. The "City of London" (which is where the Tower of London is but not the Palace or Houses of Parliament) is the European version of 'Wall Street". It is located on the eastern side of London, while the gentry are all in the west. While the banks and trade houses were staffed with Oxford and Cambridge educated "Elites", the trading exchanges were staffed by the more common East End/Essex Boys! The stories are that 'barrow boys' from east London, who were very quick with numbers from working their barrows, were ideally suited to working in the trading pits.
barrow boy (plural barrow boys) (Britain) A boy or man who sells goods – especially fruit or vegetables – from a barrow; a costermonger. (Britain, slang, derogatory) By extension, a financial industry worker from a working class or lower middle class family background.
