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  • How a gamer caused a trillion-dollar stock market crash

    From nypost.com

    Navinder Sarao didn’t seem like the international criminal mastermind type. He lived with his parents, wore a choppy bowl cut and, instead of three-piece suits, he favored laddish track pants. He pedaled a bike around his suburban London neighborhood and would show up to important meetings munching on a McDonald’s Filet-O-Fish. But in 2015, the online futures trader — who’d earned tens of millions of dollars from his bedroom — was arrested and accused of contributing to a troubling 2010 market crash that momentarily wiped out trillions of dollars. “Nav was an irresistible character, and his was a really ... (full story)

is it really called cheating. this happens on a daily basis nowadays. dax daily range is 400 pips which is huge for a big index like dax
Unbelievable that they went after this little fish when he doesn't have a fraction of the ability to 'spoof' that the big players do. Then again, it's not that unbelievable at all. How many bank directors went to jail after 2008?
If the platform and broker he used allowed him to buy and sell 62K E-mini contracts then how is that his fault? It seems his broker should be the one taking responsibility for allowing and executing such a thing.
I remember that day sitting at the desk as it was happening. Everyone gets really quiet just like the eerie stillness that happens in nature during before a natural disaster; just like in 2008.

SEC and NFA are always are headhunting when this happens. They were probably disappointed it wasn't a bigger fish.
some kid sitting in his bedroom of his parents house brings down the global financial markets talking about embarrassing, I'm surprised they didn't hire him but no they give us all a massive laugh to show how pathetic the US authorities are
A good read if this interests you:

https://www.forexfactory.com/showthread.php?p=13002117#post13002117
Focus.
Everything is under market/market makers control. if someone need to go to jail it will go if not it will not go anyone...
Also - Nav’s system wasn’t running at the time of the crash, but it was the crash and its subsequent investigation that lead the authorities to his parent’s door.
Focus.
I am done with US stock markets... these manipulation, CFDs, free money called margin trading, bankruptcies left & right, the whole system is rigged.... Never gonna even look back into US stocks.... Its freeking rigged market. Every now and then , they come with this BS about a young gamer or a young rogue trader who just clicked a button, and the market crashed.... BS... They just had to find an excuse to dump the casino chips and rig the market and steal the money..

Oh didnt I tell you the future of stock markets... Dow will go into a secular bearish trend, back to $4000 and Crypto tokens will take over the stock markets.... So invest in Crypto.... Also, Gold will hit $2500 soon....BTC to $20,000 and then to unknown territory...If you really paranoid about stocks, buy emerging market stocks...
You really think the Bitcoin market isn't rigged?
Quoting RazorFitch
I am done with US stock markets... these manipulation, CFDs, free money called margin trading, bankruptcies left & right, the whole system is rigged.... Never gonna even look back into US stocks.... Its freeking rigged market. Every now and then , they come with this BS about a young gamer or a young rogue trader who just clicked a button, and the market crashed.... BS... They just had to find an excuse to dump the casino chips and rig the market and steal the money.. Oh didnt I tell you the future of stock markets... Dow will go into a secular...

I agree with you mostly. I'm not touching bitcoin with a fucking pole whether it hits $1, $20k or $100k. The volatility on bitcoin is nauseating. Gold is definitely a safe buy in my opinion. I got on the gold train way too late when the price was already $1300. I now regret those few years where I saw gold around $900 and I didn't step in to get a piece of the pie. U.S stock market is a crock of crap with fed intervention out of this world. Though I'll be looking for good value stock when it crashes. I'm not buying into this severely over pumped market you'd have to be insane to buy at these prices. As they say what must go UP has to come down. I'll just wait patiently and keep my forex trades to sustain me.
The markets are like water it ebbs and flows.
I don't think one year house arrest is a punishment for him. 😄

But a smart guy, hats off.
Everyone can see the chart, but only a few can actually read it.
From$1toMillion EA All Time Return: 35.7%
I would never buy gold in this crisis, people will need to sell soon...
Proverbs 18.15
a very smart Cookie, doing it better than the big fish
certainly beats Jordan Belfort even on a good day :-)
good on him ~!
Old Dog Kiwi
Quoting renminbi
If the platform and broker he used allowed him to buy and sell 62K E-mini contracts then how is that his fault? It seems his broker should be the one taking responsibility for allowing and executing such a thing.
It's called DMA/Sponsored access. He wasn't a retail trader. His clearer (not broker) would've been very active in helping the CME investigate (prior to the crash itself when the CME queried his activities) else risk losing exchange access themselves.
Quoting YYZ
Everything is under market/market makers control. if someone need to go to jail it will go if not it will not go anyone...
I've never heard anyone call themselves market makers in the emini S&P500. At a push you've got HFT stat arbers and program traders and the like. Not market makers per se. I'd be amazed if the CME have an active market maker incentive program in one of the most successful liquid contracts in the world!!
Quoting giveachance
is it really called cheating. this happens on a daily basis nowadays. dax daily range is 400 pips which is huge for a big index like dax
Yes, yes it is called cheating. Don't really understand your point re Dax range.

Working visible orders in the order book that you don't intend to honour, of any size, is cheating and illegal.

What regulators don't understand is that front running was and still is the cheating method of choice for many of the HFT funds/desks and sell side out there. Spoofing was the natural antidote to frontrunning. We had for a while a market where if anyone dared to frontrun they might just be frontrunning fake orders and so only stand to lose when said orders get pulled.

Today, sadly, it is just frontrunning that remains. With all the increased audit trail with Mifid2, anyone that dares to spoof is looking at a very short run in the industry. This is why exchanges now sell "level 3" data allowing the sophisticated trader (think HFT type) to get the nod nod wink wink as to the true intentions behind the order book. So much easier without spoofers present.

And there you have it. Anyone can spoof and make exchanges and institutions lives more difficult. Eliminate the small time spoofer and the institutions get an easier ride, make more consistent money and continue paying those big fees to the exchanges.

I wouldn't call it de facto corruption. Just the way it goes I suppose. But, yeah I too think Nav is a pretty cool icon to draw inspiration from (bar the cheating part ofc!).
Cheater. Not a trading savant. And he got to keep all his money plus a trip to US and back.
I wonder what are the ways we can cheat in FX? Anyone? I think all holes are plugged in FX trading.
The only thing left to make money is the honest 50/50 decision you always have to make.

The only cheat I can think of is arbitrage but knowing there are EA's specifically made for it, I don't think it's really a cheat.
Quoting OutThere
Cheater. Not a trading savant. And he got to keep all his money plus a trip to US and back. I wonder what are the ways we can cheat in FX? Anyone? I think all holes are plugged in FX trading. The only thing left to make money is the 50/50 decision you always have to make.
Nah, he lost all his money. Got conned out of it by spurious wealth managers. True story. Tbh it probably did wonders for his defence.
give that man a medal!! the house doesn't like it when it loses
Quoting ww3361
{quote} I've never heard anyone call themselves market makers in the emini S&P500. At a push you've got HFT stat arbers and program traders and the like. Not market makers per se. I'd be amazed if the CME have an active market maker incentive program in one of the most successful liquid contracts in the world!!
Personally I have and I use general term for anyone who can move price and can control price and timing : market maker. This serves my trading and that is good enough for me.

In my opinion in this particular case market makers did not like that someone over smart them and ignore their letters of warnings to this smart trader Navinder. So market makers proceeded with court just to let know to others who is in charge...

there are much more serious manipulation on daily basis then spoofing ...like dark pools, Jim cramer while was fund manager manipulated market and publicly , on record admitted it... How many went to jail in 6 trillion USD daily forex market and whatever is in stock market amount of money transactions, gold , oil...?
I do not know but I do believe that this is negligible number relative to serious matter.
Quoting ww3361
{quote} I've never heard anyone call themselves market makers in the emini S&P500. At a push you've got HFT stat arbers and program traders and the like. Not market makers per se. I'd be amazed if the CME have an active market maker incentive program in one of the most successful liquid contracts in the world!!
CME does, still, offer liquidity bonuses but no, there are no "market makers" in the ES futures
A complete and utter BS job. To headline that a guy sitting in his parents house could engineer a stock market crash .. and then to pursue and charge him what ever he did is such hypocritical BS a to be unbelievable. Its a bit like trying to extradite a 15y/o autistic teenager for hacking the pentagon.

WHO SHOULD BE CHARGED are the guys that are being paid 00 of thousands to stop this happening and who criminally FAILED.

The big guys get away with their criminal negligence and the dumb fk who beat their collective incompetence ends up as federal felon. because the corruption is INSIDE the system
As someone observed NO BANKER went to jail from major Bank for the 2008 debacle.
Nobody from the rating agencies was charged with criminal negligence. No Brokers were charged with conspiracy to defraud for executing mortgages to people with no income no capital and barely a pulse.

The ENTIRE US financial system (and hence I worry that perhaps the entire society) is corrupt..top to bottom.
Unlike corruption in 3rd world countries, and even as seen in civilized places like Greece Italy and Spain. wher most tangible corruption is outside the system. The problem for the US is that its built INTO the system.
Warning: A Dangerous Subversive: 1% of comments CoCed
Yeahhh

Like that Wirecard fraud.

Years of neglected sh.t
Beware of robber banks (RB), bad advisors.
Der Trader All Time Pips: 52,970
Quoting RossEdwards
A complete and utter BS job. To headline that a guy sitting in his parents house could engineer a stock market crash .. and then to pursue and charge him what ever he did is such hypocritical BS a to be unbelievable. Its a bit like trying to extradite a 15y/o autistic teenager for hacking the pentagon. WHO SHOULD BE CHARGED are the guys that are being paid 00 of thousands to stop this happening and who criminally FAILED. The big guys get away with their criminal negligence and the dumb fk who beat their collective incompetence ends up as federal...
Tbf, that's why he didn't go to jail. They asked him to point the finger at those that enabled him (Chicago software developer chap) and let him off lightly. Regulators are always behind and I suspect they needed Nav's corporation to try and catch up a little.
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  • Posted: Jun 28, 2020 1:49am
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     Newsstand
    Category: Entertainment News
    Comments: 25  /  Views: 17,180