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is this insider trading?
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is this insider trading?

  #21 (permalink)
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Big Mike View Post
Insider trading is when Congress is made aware of certain events surrounding a publicly traded company, and then they go home and call their broker and modify their positions based on their inside information. And it's not even illegal.

Mike

Oh, I guess they finally closed that huge loophole.

http://www.nytimes.com/2012/03/23/us/politics/insider-trading-ban-for-lawmakers-clears-congress.html

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  #22 (permalink)
Fortitudo et Honor
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There are some "government reports" that are made available "early" to some people, through subscription services. I cannot recall all the specifics because I do not use them, but I am thinking that for example you can be a member of the Dow Jones wire service and get some reports 3 minutes earlier than they are made publicly available over conventional wires.

That is just an example.

I do not consider this to be insider trading, because anyone can just sign up for the service and take advantage of this "service".

In the HFT webinar (if I recall) it was discussed how some institutions/firms are hitting government websites so hard (hits) at the time of certain reports that not only do they get the numbers first, but they also purposefully slow down the response time of the web server so that everyone else has to wait a few more milliseconds, giving them an edge.

I would not call this insider trading either.

Insider trading is when Congress is made aware of certain events surrounding a publicly traded company, and then they go home and call their broker and modify their positions based on their inside information. And it's not even illegal.

Mike

So if someone has connections to the Fed board and knows what the language/decision is going to be and then tells their buddy (or trades it themselves) ahead of time, that's not insider trading?

What then do you call it?

If Goldman Sachs has connections at the FBI/NSA/CIA or even run of the mill government officials who inform them that there's a high probability of a terrorist attack using commercial airlines and then they take up short positions before the event....what do you call that?

I don't see a difference just because it's with commodities or equities.

I used the same example with the SOR. Everytime a President even whispers about releasing the SOR, oil responds and if they do release it, it drops signficantly, that's valuable information.

Whatever you call it, it's wrong. It gives certain people inside information about relevant market inputs that are not available to everyone. In essence, they're benefitting by being in an advantageous trading stance simply because of their job or their connection/inside status.

I see no difference between that and a CEO who starts to shed his equity in a company because he knows it's about to topple....or more likely, he calls up his buddies and informs them....as company stakeholders are monitored closely.

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  #23 (permalink)
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RM99 View Post
So if someone has connections to the Fed board and knows what the language/decision is going to be and then tells their buddy (or trades it themselves) ahead of time, that's not insider trading?

Yes, that is insider information.

I had to deal with this in my previous "day job", because I was day trading the stock of the public company, and sometimes the meetings I was involved in would involve board decisions so I always left the room to keep things honest. I was not an insider, but the people on the phone were, and could have gotten in trouble for telling me information.

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  #24 (permalink)
Fortitudo et Honor
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Just the visible hole. There's still cronyism and politicians still have friends, backers, donors, lobbyists, etc.

Again, I think of the recent ruling on Visa and Mastercard. That judge held in his hands, a very valuable piece of information, if he were to trade it himself, or inform anyone, that's wrong.

The same with Department of Energy officials who are aware about the department's changes in oil leases, etc. Insider information gives them an unfair advantage that the market is not yet privelaged to....

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  #25 (permalink)
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There is nothing on this chart to indicate "insider trading".
Reversals prior to news announcements are common.

There will ALWAYS be people with better technology, better knowledge, better research and better methods to measure efficiency in the markets, BUT it does not mean that it would be utilized towards insiders trading. The CFTC maintains position limits, and the exchanges (both stocks and commodities) do follow irregular activities via algorithmic solutions.
It would be hard to be an insider consistently.

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  #26 (permalink)
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RM99 View Post
Just the visible hole. There's still cronyism and politicians still have friends, backers, donors, lobbyists, etc.

Again, I think of the recent ruling on Visa and Mastercard. That judge held in his hands, a very valuable piece of information, if he were to trade it himself, or inform anyone, that's wrong.

The same with Department of Energy officials who are aware about the department's changes in oil leases, etc. Insider information gives them an unfair advantage that the market is not yet privelaged to....

It's no different than the Libor scandal, or even the typical ratings agencies like Fitch and S&P. It has never been about what you know, it's always who you know. Can't you just picture Fitch calling up Goldman and asking their permission, basically, before making a revision that would negatively impact them?

It was just recent news how Morgan Stanley or someone (can't recall, sorry) basically negotiated their downgrade with Fitch/S&P. That's laughable.

To me, it's all in the same category. It's all wrong, but it is the world we live in, and more specifically, the market we trade in. I have a choice to not trade if I don't want to. I would rather trade, because I believe even with all this crap, there are still enough opportunities to make a living and enjoy it.

Don't let the conspiracy stuff get to you. Don't be one of the guys saying Goldman is running your stop, or HFT bots are out to get you.

https://futures.io/traders-hideout/19777-awesome-new-chart.html

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  #27 (permalink)
Fortitudo et Honor
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Big Mike View Post
It's no different than the Libor scandal, or even the typical ratings agencies like Fitch and S&P. It has never been about what you know, it's always who you know. Can't you just picture Fitch calling up Goldman and asking their permission, basically, before making a revision that would negatively impact them?

It was just recent news how Morgan Stanley or someone (can't recall, sorry) basically negotiated their downgrade with Fitch/S&P. That's laughable.

To me, it's all in the same category. It's all wrong, but it is the world we live in, and more specifically, the market we trade in. I have a choice to not trade if I don't want to. I would rather trade, because I believe even with all this crap, there are still enough opportunities to make a living and enjoy it.

Don't let the conspiracy stuff get to you. Don't be one of the guys saying Goldman is running your stop, or HFT bots are out to get you.

https://futures.io/traders-hideout/19777-awesome-new-chart.html

Mike

I find it curious that the last couple of bombs with respect to ratings always come when the market is closed. To me, that's even more indication of insider shenanigans.....tell your friends about the upcoming news, then wait for Friday's close after all the insiders have slowly bled into their positions and watch the market stew all weekend and buildup an enormous gap.

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  #28 (permalink)
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Private Banker View Post
No offense but this is a bit comical. The specimen being used here is a 1 minute chart of the pre-market action where price was simply making a pullback to a basic trend line and moving average. How in the world would this be considered market manipulation? This is normal market activity! Besides, the market sold off during RTH.

As far as insider info goes, just because someone knows something before news is released does not mean they're going to move the market! Usually if someone has inside info, they're going to be small and discreet don't you think?

well, 1st, I wasn't sure it was insider trading, I just suspected it.

and 2nd, if I were a market maker and I somehow got to know the news beforehand, what would I do? of course I'd choose to drive the market to the opposite direction first, and it'd have been relatively easy to do so, since the market was quite thin before news, and I'd want it to stop at an obvious S/R, since it'd be even easier for me to drive it back with other people's help. and when the news came, bang, the market explodes and my investment is easily double/triple/quadrupled.

it probably doesn't take much effort for a market maker to do this, and the Risk/Reward can be great. so I don't see why they wouldn't want to do this on a regular basis. and it's even better if they could disguise it as a normal pullback and reversal at s/r, this way they don't even have to worry about getting caught.

but anyway, it doesn't matter what this is. the only thing that matters is how can we profit from this. I'm sure there are people here who already does that on a regular basis. it'd be great if they could share some insight.

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  #29 (permalink)
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RM99 View Post
I'm not arguing about moving the market, I'm saying that the game is rigged for some folks. By the time the news outlets report the UE report....there's any number of people who've already had that information available to them in order to make an advantageous decision about the market.

Whether or not they move the market (which can or can't be noticed) is a different debate.

You're pretty funny.


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  #30 (permalink)
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iPlayGames View Post
well, 1st, I wasn't sure it was insider trading, I just suspected it.

and 2nd, if I were a market maker and I somehow got to know the news beforehand, what would I do? of course I'd choose to drive the market to the opposite direction first, and it'd have been relatively easy to do so, since the market was quite thin before news, and I'd want it to stop at an obvious S/R, since it'd be even easier for me to drive it back with other people's help. and when the news came, bang, the market explodes and my investment is easily double/triple/quadrupled.

it probably doesn't take much effort for a market maker to do this, and the Risk/Reward can be great. so I don't see why they wouldn't want to do this on a regular basis. and it's even better if they could disguise it as a normal pullback and reversal at s/r, this way they don't even have to worry about getting caught.

but anyway, it doesn't matter what this is. the only thing that matters is how can we profit from this. I'm sure there are people here who already does that on a regular basis. it'd be great if they could share some insight.

I don't think you're understanding my point so, let me explain better what I meant. I guess I was assuming you would understand, sorry about that.

My point was, looking at a one minute chart on crude oil is very myopic in my opinion. The swings are typically huge and are better observed with a larger period.

As for the move in question, I've attached two charts for reference. The first is simply showing a basic pullback to a 100 EMA which can serve as support and resistance on a trending day. The second chart is the same thing but with the footprint showing how volume dried up on the pull back and found support at the EMA and consolidated until the unemployment report came out. At that point, a flurry of buy market orders hit creating an extremely fast moving market making fills appear to be all over the place. These orders were most likely algos firing in orders and pushing the market higher.

So, my point is, the market pulled back to support. On a time based chart like a one minute, whenever you see big bars and then a bunch of small bars that pullback in price, that means the market is simply pulling back to support. Once support was found, you can see more strong thrust bars come in. This is basic market activity. Hope that helps.

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