Well Count,
If - and it is MASSIVE "IF" - this story is true, then he did do something "wrong".
No, its not "spoofing" trades, or "manipulation" of orders - because plenty of trading houses do this.
So, its not that. His mistake (and that's if the story is true), is that what he did was out of tune with the central cartel's pro-recovery theme & policy (thus, helping expel some air out the bubble - and we can't have that now can we!).
For my money (excuse the pun), the story is absurd. He's a scape-goat. I mean come on, a sole trader taking on the floor against Goldman, JPM and co?
How can one place an order of some magnitude without the margins to fund the said orders to be filled?
My own CV is littered with past episodes of shame (i.e. working in the City, but not responsible for any crash!), and I can tell you three things:
1. when you come to the table to play a game to move the markets like he did - you need to come prepared with hundreds of millions - and even then, it may not work.
2. The trading arms of these firms always pump the markets with a big order every now and then. It is par for the course, before institutions take on the real buys.
3. Have a look at the order books, check out nanex too if you must - the big players do this all the time - but the direction is on the buy side, and that's probably the difference.
There are many questions to be asked, and so far, they haven't been. So, here's one:
If a suburban trader can crash the markets from his home, then what can banks with billions or nations (that we don't like) with Trillions of USDs do?
OK, here's a solution:
Ban HFT any other firms from creating fake orders. Hit them with cancellation orders and see how orderly the market becomes. But it won't be done, because these "firms" bring so-called liquidity to the markets.
....
Paitech, good to hear from you man!
I have to admit that I'm surprised that you were allowed to keep all the money you "won" from that trading session. As I recall, they were considered null-and-void, and reverse transactions were made to recover any gains.
But if you did make the cash, then Kudos! good for you!
Your secret is safe with me - and the entire internet!
