mattz 

When you place a price of -1.00 as his demo indicates while the market is 16, it would be out of Exchange daily limits whether live or demo. His demo simply telling the rules of the exchange - not rejecting it because the order is price negative.

Sorry if I hurt you, it was not intentional! I guess it's just that I deal with facts and I deal with regulations all the time in my business. The public has expectations of me to be honest, fair and to not disseminate any information that is not factual. If I don't have all the facts then I need to be clear about that and not try to pass myself off as having full knowledge about a particular subject if I don't. I mean no disrespect, honestly, I guess I'm just holding you up to a higher standard! I will do my best to be less assertive in the future!

Once again though, I have to completely disagree with your take on this. To prove the point I have gone out of my way to show more proof of the problems that existed then and still exist now. What you will now see below is CURRENT screenshots, taken over a month after "the incident" via CQG desktop. What you see here is a resting limit order to buy at 0.01, A rejected order to buy at -0.01 and another order on TWS platform to buy at -1.00 when the market price is in the $35 range.

I think the evidence speaks for itself!!!

mattz 

If you recall the Flash Crash of 2010, thee Bid-Ask was 12 points ($600), not the typical one tick you see. I saw the same type of behavior on the ES Options during the meltdown of 2018. My point is not to absolve brokers or FCM from their fiduciary duty. We have our roles, and we must comply with regulations and rules pertaining to us. However, Futures as an asset class can behave beyond the scope and control of the broker and the technology they carry. As an asset class, you are trading high leverage, global markets that go at times into harsh trading environments where you could potentially lose way beyond your initial investment. "Normal times" with less volatility make us at times "relaxed" about the asset class we trade. This year was a sober reminder of what happens when a global event shakes the market and how the Futures market behaves.

I do remember the Flash Crash of 2010. I got my head handed to me then, trying to buy some index puts, for crying out loud, to make some money on the decline, and getting filled way, way above the price I had put in the market order for, in a market that was now insanely rising, as price hit bottom and bounced up insanely, and all technology basically froze -- instant big loss, even though I was completely right about "the market" at the time I pressed the button.

What it showed me is that the perfect world that is now seen in sim trading doesn't exist. At the time, it was the perfect world of my conception of the market -- always orderly, always (smile) rational, working exactly like our static, after-the-fact charts looked. Never simply insane.

-----------------

Does this mean that no broker is at fault about the CL mess? No. I don't know who is at fault, but what has come out so far does not look so nice for at least some of the brokerage community, and/or other parts of the infrastructure.

And if negative prices were technically possible, then the technology should had allowed for it. Obviously.

More will come out, but the thing I learned in the original Flash Crash (this was the first of several) is that not one single thing in the market "has to" happen in any particular way. Any broker or any other part of the infrastructure that failed in its job -- which is basically to keep the market orderly -- needs to be called out. It seems that some may have been seriously at fault on the simple and basic question of whether something that could happen (negative prices) can happen for their software. Some may be at fault on the equally simple and basic question of whether they owe their customers an honest dealing (yes, they do.)

But nothing "has to" happen in the markets the way it's anticipated, and that is also part of the reality of trading.

Bob.

-------------

Edit: I see I was typing right while things started up again in the thread but I didn't see them. I'll shut up now. Sorry, folks.

bobwest 

Does this mean that no broker is at fault about the CL mess? No. I don't know who is at fault, but what has come out so far does not look so nice for at least some of the brokerage community, and/or other parts of the infrastructure. And if negative prices were technically possible, then the technology should had allowed for it. Obviously.

There are many dimensions to this entire fiasco, which makes it easy to point culp-ability in various directions by just about anybody. Considering what I already know and who I know, I really could say a lot more... my evidence goes much deeper than I ever plan on providing here in public.

Regardless ... somethings I can share, which quite frankly, are all publicly available pieces of evidence, and which the CFTC is already aware of. So for now I'll conclude with my final exhibit on this and knowing what I've already shown here, on Sunday - May 10, 2020 AMP issued the following news release in which they state:

"From what we experienced, when Crude Oil (CL) May 2020 Contract - Traded Negative for the 1st time in History...that the market conditions are not normal once prices traded negative. The orders we researched for our customers, were either REJECTED by CME due to Velocity Logic Circuit Breaker or were REJECTED due to not safe market conditions > NO BID - NO OFFER."

https://news.ampfutures.com/temporary-margins-increase-energies-complex-april-2020

What more can I say that doesn't speak for itself. AMP trying to place blame on CME for something they will never be able to prove is completely wreck-less! I've been trying orders ever since 4/20, I tried limits, stops, 0 and negatives. Actually the 0 gives different outcome and changing/replacing or submitting new orders can give slightly different reject message. Nonetheless, negatives never work. I was quite surprised to try it again tonight and see the same old reject code! I've had friends try it as well, it's always the same result!

If anybody here has been damaged by this event please PM me, I will require you to prove to me you have losses before I tell you anything more about getting restitution. You aren't alone in this matter and you don't have to go about it by yourself. I don't particularly plan on continuing with this topic unless anyone wants to ask anything specific from me, I'll do my best to respond.

RT777 

There are many dimensions to this entire fiasco, which makes it easy to point culp-ability in various directions by just about anybody. Considering what I already know and who I know, I really could say a lot more... my evidence goes much deeper than I ever plan on providing here in public. Regardless ... somethings I can share, which quite frankly, are all publicly available pieces of evidence, and which the CFTC is already aware of. So for now I'll conclude with my final exhibit on this and knowing what I've already shown here, on Sunday - May 10, 2020 AMP issued the following news release in which they state: "From what we experienced, when Crude Oil (CL) May 2020 Contract - Traded Negative for the 1st time in History...that the market conditions are not normal once prices traded negative. The orders we researched for our customers, were either REJECTED by CME due to Velocity Logic Circuit Breaker or were REJECTED due to not safe market conditions > NO BID - NO OFFER." https://news.ampfutures.com/temporary-margins-increase-energies-complex-april-2020 What more can I say that doesn't speak for itself. AMP trying to place blame on CME for something they will never be able to prove is completely wreck-less! I've been trying orders ever since 4/20, I tried limits, stops, 0 and negatives. Actually the 0 gives different outcome and changing/replacing or submitting new orders can give slightly different reject message. Nonetheless, negatives never work. I was quite surprised to try it again tonight and see the same old reject code! I've had friends try it as well, it's always the same result! If anybody here has been damaged by this event please PM me, I will require you to prove to me you have losses before I tell you anything more about getting restitution. You aren't alone in this matter and you don't have to go about it by yourself. I don't particularly plan on continuing with this topic unless anyone wants to ask anything specific from me, I'll do my best to respond.

I am not here to put in an new information as I am quite ignorant on this particular subject but what I will say is ANYTHING can and will happen and you HAVE to know no one will protect you.

I've said this before and I don't believe I'm being cynical... business are out to make profits and protect their OWN interests. If those interests aligned wth YOUR interests great if not... LOOK OUT!

Sent using the NexusFi mobile app

Sandpaddict 

I am not here to put in an new information as I am quite ignorant on this particular subject but what I will say is ANYTHING can and will happen and you HAVE to know no one will protect you. I've said this before and I don't believe I'm being cynical... business are out to make profits and protect their OWN interests. If those interests aligned wth YOUR interests great if not... LOOK OUT! Sent using the NexusFi mobile app

I agree in the general sense, most people and businesses live down to expectations!

However in this case, you can only harass your customers so far before they congregate and fight back!

The good news is, CFTC provides attorney's for free! They can also seek restitution and they CAN PROTECT THE CUSTOMER.

I also happen to believe the recent hoopla surrounding large accounts with AMP is not a coincidence and is very much related to CFTC investigations. In the last 2 weeks we've seen 2 large account holders make noise on other channels. One had an account closed after 4 years. The other had potential bait and switch made on them. If you start to connect the dots you will soon see a common theme to all of this. All these matters have to do with the Risk Management Program, or lack thereof! If people want to believe that AMP is being genuine and acting on customers behalf willingly, I have some swamp land I'd like to sell you!

RT777 

I agree in the general sense, most people and businesses live down to expectations! However in this case, you can only harass your customers so far before they congregate and fight back! The good news is, CFTC provides attorney's for free! They can also seek restitution and they CAN PROTECT THE CUSTOMER. I also happen to believe the recent hoopla surrounding large accounts with AMP is not a coincidence and is very much related to CFTC investigations. In the last 2 weeks we've seen 2 large account holders make noise on other channels. One had an account closed after 4 years. The other had potential bait and switch made on them. If you start to connect the dots you will soon see a common theme to all of this. All these matters have to do with the Risk Management Program, or lack thereof! If people want to believe that AMP is being genuine and acting on customers behalf willingly, I have some swamp land I'd like to sell you!

Agreed! Just waiting for moderators to step in but I hope they don't as this is a wake up call to anyone thinks this kind of stuff can't happen.

Thanks again RT777!

Sent using the NexusFi mobile app

Sandpaddict 

Agreed! Just waiting for moderators to step in but I hope they don't as this is a wake up call to anyone thinks this kind of stuff can't happen. Thanks again RT777! Sent using the NexusFi mobile app

Thank you for your support! I know not everyone feels the same way, mostly the uninformed though...

I think the moderators here are interested in real news, which is very refreshing! Given the antics recently witnessed on other channels, the deletion and editing of certain posts and the closure of certain threads. I applaud the mods here for their fairness and for providing a venue to tell both sides of the story.

This is far from over and much more will come to light in the future. In the meantime, we can all witness the ongoing saga of Captain Dan vs the Iceberg (aka CFTC). Had AMP settled fairly with their customers when the customers gave them the chance, the fallout would have been limited. AMP decided to risk it yet again, they decided to go on the offensive to try and bully the customers at the hand of their own negligence. Unfortunately for them that was a bad choice and it will cost them more in the long run.

I wouldn't leave my hard earned savings with this bucket shop! It's only going to get worse for them!

THIS ISN'T GOING AWAY!

RT777 

Thank you for your support! I know not everyone feels the same way, mostly the uninformed though... I think the moderators here are interested in real news, which is very refreshing! Given the antics recently witnessed on other channels, the deletion and editing of certain posts and the closure of certain threads. I applaud the mods here for their fairness and for providing a venue to tell both sides of the story. This is far from over and much more will come to light in the future. In the meantime, we can all witness the ongoing saga of Captain Dan vs the Iceberg (aka CFTC). Had AMP settled fairly with their customers when the customers gave them the chance, the fallout would have been limited. AMP decided to risk it yet again, they decided to go on the offensive to try and bully the customers at the hand of their own negligence. Unfortunately for them that was a bad choice and it will cost them more in the long run. I wouldn't leave my hard earned savings with this bucket shop! It's only going to get worse for them! THIS ISN'T GOING AWAY!

Yes, the moderators on here are some of the best out there. No question!

And to think we ARE LUCKY.

If this happened 20-30 years ago when transparency wasn't anywhere it is today! Yikes!

Good reporting though RT777!

Sent using the NexusFi mobile app

bobwest 

................... Does this mean that no broker is at fault about the CL mess? No. I don't know who is at fault, but what has come out so far does not look so nice for at least some of the brokerage community, and/or other parts of the infrastructure. And if negative prices were technically possible, then the technology should had allowed for it. Obviously. More will come out, but the thing I learned in the original Flash Crash (this was the first of several) is that not one single thing in the market "has to" happen in any particular way. Any broker or any other part of the infrastructure that failed in its job -- which is basically to keep the market orderly -- needs to be called out. It seems that some may have been seriously at fault on the simple and basic question of whether something that could happen (negative prices) can happen for their software. Some may be at fault on the equally simple and basic question of whether they owe their customers an honest dealing (yes, they do.) But nothing "has to" happen in the markets the way it's anticipated, and that is also part of the reality of trading. .......

Here is how I would approach the negative price issue. I would break it into components and see what role each part had in this unprecedented situation. Naturally, when people say "broker," they treat it like a single component, but that is not the case. For example, companies like IB or TD have all in one technology, risk management, and execution(as far as I know). Other FCMs in the industry use ISVs (Independent Software Vendors) to provide the quotes, charts, and order routing. At the same time, the backend on the FCM level offers the risk management system: Margins, positions, etc. ISVs provide a "box" that FCMs need to work with. Some could program on top of it, but for the most part, the ISV risk modules are built-in. The ISVs also deliver the orders to the exchange.

If there is an error delivering an order to the exchange or other malfunction, the ISV and FCM work together to resolve it. Each ISV (I presume) builds an internal code and systems to satisfy exchange conformance as they see fit.

The second component in this scenario would be the exchange. The exchange has its malfunctions; however, I do not have enough expertise to determine how it behaved during negative prices. As far as I recall, I have never seen negative rates on an exchange level, although they do exist at times on cash markets. I'll leave this to the experts who will investigate this. I hope that they will look into the fact that CME released a negative price alert five days before the event, and expected FCMs/ISVs to adjust it over a period that included the weekend during COVID-19.

The third component is the broker/IB/FCM, and how they interacted with all of the above. How they interacted/implemented what they were given is crucial.

Lastly, it's the customer. So when trading Oil contracts that are cash delivered, you have to know the risk of trading the last day of a deliverable contract (as opposed to trading the next month) and the dangers of negative prices.

The last part is the market conditions. The Bid-Offer spreads could be wide, and would not allow a trader to get or a broker to get him/her out.

So all these components will be examined is someone has a dispute. There are many more components like where orders reside when you place them (server or exchange), latency, servers, redundancy, etc. But I think by now you see it is not as easy as just pointing to one party.

Bob, this is my last post concerning this topic. As I said, I come here to help, and while I can address all the issues, I feel it's done in an environment of confirmation bias, and not with an open mind.

Lastly, I am not here to promote Futures trading or defend an FCM, the ISV, or the exchnages. As a broker, I am here to assist those who did decide to enter the Futures industry so they could be informed of the complexity of these products and the high risk of trading these instruments. Futures are not wealth-building instruments, and if someone decides to trade their risk capital (all they should trade), then at the very least read, read, and talk to pros. After many years in the industry, I still consult, read, and make the best efforts to be informed. Despite all our efforts, brokers, FCMS, IBs, exchanges, and regulators could face situations we have never seen before. We all need to cooperate so we can learn even from adverse circumstances. Name-calling, insults, adding "fuel" to the fire, and pitchfork mentality over personal grievances adds very little to the customer's education.

I wish all the players in the harmful oil circumstances the best of luck, and we hope for better days.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Is it true the retail guy is always the last to know!?

I got the memo, it's pretty clear what the retail guys were told ...



Do I really need to point a big red arrow to it?!



Did any retail guys get any of those 'other' memo's about negative pricing?

April 3rd CME notified CME Globex and Market Data Customers of “Changes to Price and Strike Price
Eligibility Flags for Certain Energy Products”.
https://www.cmegroup.com/notices/electronic-trading/2020/04/20200403.html

April 8th CME notified Clearing Member Firms of “CME Clearing Plan to Address the Potential of a Negative
Underlying in Certain Energy Options Contracts”.
https://www.cmegroup.com/content/dam/cmegroup/notices/clearing/2020/04/Chadv20-152.pdf

April 15th CME notified Clearing Member Firms of “Testing opportunities in CME’s “New Release”
environment for negative prices and strikes for certain NYMEX energy contracts”.
https://www.cmegroup.com/content/dam/cmegroup/notices/clearing/2020/04/Chadv20-160.pdf

April 20th CME sent an email to market participants stating “The following May 2020 Energy products (CLK0,
HOK0, QHK0, QMK0, QUK0, RBK0, HCLK0, RTK0, WSK0, RLXK0, TCSK0, MPXK0, 23K0, CSXK0, 26K0) have no low
limit and may trade negative."


I was subscribed to receive IMPORTANT messages but somehow never got any of the insider ones ...