The reason why it happens and continues to happen is the fines are meaningless. To quote an energy trader in Calif on bottling up power after getting long, "it's just economics". With perverted thinking like that, this stuff was mushrooming. Bear got ripped for 160 big ones. that was huge. I look for much, much more.
Absolutely. The next time you see a stock gap up on after-market news, check the trading activity leading into the close. More often than not, you'll see a clear picture of information that was leaked to trading desks. The SEC says they are focusing on such activiites. Baloney. They can't track every phone call, Blackberry msg, or note that is passed on the street.
I know for fact such occurs here in Canada. Thus, I'm going to assume such occurs in the U.S. markets. Completely Agree. Mark
Just to address the title of this thread...5% of traders who make money.... Hmm, now come on guys, let's get real with this. Even if only 5% of brand new traders make money (it's more than that, IMO)...so what? To think that 5% of traders make money is silly....if you don't make money, then you're not a trader any longer. I venture to say that more likely 90% of seasoned traders make money (there are always a few who "hang on" when they shouldn't, LOL). Just FYI... Don
I'm not convinced it's more than 5% Don. Depending on what you call making money , maybe some get lucky , but consistently making money when brand new , that must be rare .
Prop desks talk to institutional brokers don't they? They can use email and instant messaging to give out info.,instead of cell phones.
Front running can be quite profitable, no doubt. But it's not simply front-running. Do you think you could make money by 'back-running'? .. my thought... uh yeah. Heck, I'd just like to know what some of the big players are doing period. That would be an edge worth a lot.... despite how that information is played.
This is why we teach our people to trade on the same side as the Specialist - much better than trying to compete with them. We suggest getting rid of the ego and simply follow the people who make all the money. FWIW, Don
This is news? It's been detailed in books and Cramer's autobiographical "Buzz and Batch" series. How'd you think a poor trader and terrible stock picker could get so much money?