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News Leaks?

  • #1
  • First Post: Edited 8:39am Oct 29, 2009 8:25am | Edited 8:39am
Scheduled financial news is assembled and released, at the appointed time, by government bureaucrats.

NFP, for example is done by the US Dept. of Labor.

There is no doubt in my mind that some of these people have arranged to position themselves in the market, prior to the releases.

If there was a way to detect what they do and how they do it, it would be very profitable.

If you were a bureaucrat in the "know", and were absolutely certain of the numbers for next weeks NFP, how would you capitalize on it without getting caught?
  • #2
  • Oct 29, 2009 8:41am Oct 29, 2009 8:41am
I would tell my mom and she would place trades thru her account.
FF = Forex Faggots
  • #3
  • Oct 29, 2009 8:46am Oct 29, 2009 8:46am
Quoting 8fingers
I would tell my mom and she would place trades thru her account.
Don't you think it would be suspicious if you had a job handling the NFP numbers and your mom was trading on the right side of them, every month?

I think you'd get caught and I doubt if your mom would be trading big enough to make it worth the risk.
  • #4
  • Oct 29, 2009 8:51am Oct 29, 2009 8:51am
have somebody trusted internationally place trades for you, the easiest thing to do.
  • #5
  • Oct 29, 2009 8:54am Oct 29, 2009 8:54am
If I were going to do it, I'd do it properly. Get another identity, new passport, new everything. Several accs based over multiple brokers, ECNs. Stagger my trades over a period of hrs and days, vary sizes etc etc.
  • #6
  • Oct 29, 2009 9:01am Oct 29, 2009 9:01am
Quoting billbss
Don't you think it would be suspicious if you had a job handling the NFP numbers and your mom was trading on the right side of them, every month?

I think you'd get caught and I doubt if your mom would be trading big enough to make it worth the risk.
I throw her "under the bus" if I am caught-maybe they go easy on me in prison?
FF = Forex Faggots
  • #7
  • Oct 29, 2009 9:02am Oct 29, 2009 9:02am
Here are a couple of my thoughts:

1. The potential profit would have to be large enough to make it worth losing my job and maybe doing a few years in jail.
I'd want at least a few million out of it.

2. A typical government worker does not have enough capital to make a trade that would return even close to that much.

3. Therefore, I would try to sell the information to a crooked bank or another trader with extremely deep pockets- someone in the Soros category.
  • #8
  • Edited 9:29am Oct 29, 2009 9:08am | Edited 9:29am
Quoting billbss
Here are a couple of my thoughts:

1. The potential profit would have to be large enough to make it worth losing my job and maybe doing a few years in jail.
I'd want at least a few million out of it.

2. A typical government worker does not have enough capital to make a trade that would return even close to that much.

3. Therefore, I would try to sell the information to a crooked bank or another trader with extremely deep pockets- someone in the Soros category.

But...the problem with trying to sell it, is getting caught.

Try walking into a financial institution and telling them you work for the government and want to sll the NFP numbers. You're gone.

So, I'll trade it myself.

How?- where is the most bang for the buck?
  • #9
  • Oct 29, 2009 9:24am Oct 29, 2009 9:24am
There are NO insider trading rules in forex. So they probably do leak information.

The trading floor I work for gets information/figures all the time well before standard reporting times. The people that dont are retail forex traders and this is why they get caught out and burnt more than they should.
  • #10
  • Oct 29, 2009 9:24am Oct 29, 2009 9:24am
Or Bill you can always contact me, I'm sure we can work something out for you to retire

Actually when it comes to things like this, you'd be surprised how many ppl with a few million to throw around pops up..
  • #11
  • Oct 29, 2009 9:28am Oct 29, 2009 9:28am
Quoting scooby-doo
There are NO insider trading rules in forex. So they probably do leak information.

The trading floor I work for gets information/figures all the time well before standard reporting times. The people that dont are retail forex traders and this is why they get caught out and burnt more than they should.
I'm not talking about insider trading rules being invoked.

I'm talking about a government bureaucrat caught using the sensitive information and being busted on some federal corruption charge
  • #12
  • Oct 29, 2009 9:29am Oct 29, 2009 9:29am
Quote
If you were a bureaucrat in the "know", and were absolutely certain of the numbers for next weeks NFP, how would you capitalize on it without getting caught?
You open an account with a serious broker outside of US. From time to time you trade randomly with fixed SL and TP. You'll have a nice distribution of losses and winnings and they can't detect that your profits came during NFP.
  • #13
  • Oct 29, 2009 9:31am Oct 29, 2009 9:31am
Quoting billbss
I'm not talking about insider trading rules being invoked.

I'm talking about a government bureaucrat caught using the sensitive information and being busted on some federal corruption charge
I think you will find that happens a great deal.

There are also big questions over if he/she could be prosecuted under the current controls.
  • #14
  • Oct 29, 2009 9:39am Oct 29, 2009 9:39am
Quoting scooby-doo
I think you will find that happens a great deal.

There are also big questions over if he/she could be prosecuted under the current controls.
I'll have to reserach it, but I'll bet my house that USDL employee who uses pre-release NFP numbers for his own enrichment can go to jail.
  • #15
  • Oct 29, 2009 9:43am Oct 29, 2009 9:43am
Quoting Sauron
You open an account with a serious broker outside of US. From time to time you trade randomly with fixed SL and TP. You'll have a nice distribution of losses and winnings and they can't detect that your profits came during NFP.
Makes sense.

Would you trade forex, though?
I wouldn't. Let's say I had $50,000. I'd want to make a killing in the least time possible, to reduce my exposure.
A standard forex trade doesn't offer enough leverage.

I'll post in a day or two what I would do, and what I think these people are doing.
If I'm right, it may lend itself to being tracked.
  • #16
  • Oct 29, 2009 9:43am Oct 29, 2009 9:43am
Quoting billbss
I'll have to reserach it, but I'll bet my house that USDL employee who uses pre-release NFP numbers for his own enrichment can go to jail.
Maybe you can under US rules.

But, i remember sometime back that a Japan government minister was leaking information to a third party who was placing very large forex orders prior to Asian open sessions.

He did lose his government job but was unable to be prosecuted under their rules.
  • #17
  • Oct 29, 2009 9:46am Oct 29, 2009 9:46am
Quoting scooby-doo
Maybe you can under US rules.

But, i remember sometime back that a Japan government minister was leaking information to a third party who was placing very large forex orders prior to Asian open sessions.

He did lose his government job but was unable to be prosecuted under their rules.
I see.
I may be wrong about our rules.
I'll try to look it up.
  • #18
  • Nov 3, 2009 6:39am Nov 3, 2009 6:39am
I think no smart government official would offer the data to a firm/trader.

First thought for the trader/firm is that it is an undercover detective from the FBI or SEC. The firm would refuse the offer and call the FBI/SEC immediately to report that government worker X is offering macro economic data prior to the official release.

Why would they do that? Because from their point of view this person is an undercover detective and if they would not report the person, then they would become suspicious.

No succesful firm would take that risk and all government officials with some brains understand this too.

Well, how would they "do it"?

I think it's all about networking and contacts. As a government official willing to sell this data you can go to any private membership club in NYC and meet traders there.

And no, you don't offer the data as soon as you have met a trader. Get familiar with them, meet them a couple of times and make them feel comfortable around you.

Talk about your job, what you do and what data you are responsible for. Make yourself interesting for the trader by telling that you don't like the job as much anymore, that you get sick and tired of all the rules etc and mention that you think it's odd that there are so many rules but actually not a lot of supervision on the employees to follow these rules.

It shouldn't take too long before you get an offer. If it's not from the particular trader you met, I'm sure they will tip others that you have the data and that you might be interested to sell it for a good price.

So the offer should always come from the trader/firm, not the other way around.

Once the trader has the data, they would not place a simple long or short position because it would be too suspicious. It would make more sense to place a straddle which favors your market outlook.

Quoting billbss
Scheduled financial news is assembled and released, at the appointed time, by government bureaucrats.

NFP, for example is done by the US Dept. of Labor.

There is no doubt in my mind that some of these people have arranged to position themselves in the market, prior to the releases.

If there was a way to detect what they do and how they do it, it would be very profitable.

If you were a bureaucrat in the "know", and were absolutely certain of the numbers for next weeks NFP, how would you capitalize on it without getting caught?
  • #19
  • Last Post: Nov 3, 2009 11:26am Nov 3, 2009 11:26am
Quoting artov
I think no smart government official would offer the data to a firm/trader.

First thought for the trader/firm is that it is an undercover detective from the FBI or SEC. The firm would refuse the offer and call the FBI/SEC immediately to report that government worker X is offering macro economic data prior to the official release.

Why would they do that? Because from their point of view this person is an undercover detective and if they would not report the person, then they would become suspicious.

No succesful firm would take that risk and...
I agree with what you said.
If the rogue bureaucrat started approaching people, he'd get busted in no time.

Now, whether the bureaucrat or someone he's sold the info to, is doing the trading, how would they do it?

1. They would want to make as much as they can as fast as they can, because they don't know how long this golden goose will last. Every month could be the last one.

2. They have to be mindful that even though the info is accurate, sometimes price spikes counter to the released news, at least for 50 or 60 pips.

They need very high leverage with limited downside risk.
Where is that found?
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