http://www.bloomberg.com/news/artic...ee-chicago-traders-of-spoofing-options-scheme I've never heard of this before...customer orders ahead of professional orders. How did these guys pull this off ? BTW: Two of them have "Alkaida-like" names....
As far as I know, all equity option exchanges in the US provide customer priority. There might be an exception I'm not aware of. To maintain customer priority, your account can not be owned by a broker dealer and you can't enter 390 orders or more, on average over any month, during a quarter. If you do, you are required to claim professional customer status and lose your customer priority. They feel you are competing with market makers but avoiding membership. As a benefit to being a professional customer, you can make two sided markets and the exchanges don't charge cancellation fees. Professional customers pay higher exchange fees too.
1) CBOE: https://www.cboe.org/publish/RegCir/RG09-148.pdf 2) According to the article they worked with a broker, so I assume their accounts were incorrectly labeled as non-professional 3) I really don't get your BTW comment... It is comments your that are part of the problem (spreading of hate). As far as I'm aware, the vast majority of Arabs / Muslims do not support Al-Qaeda or other extremist groups. Judging people on their name alone doesn't make any sense to me..
The “customer” and “professional” designations are supposed to apply to all accounts beneficially owned by the trader. However, the Afshars and Kenny accomplished this back-and-forth scheme through false representations that Behruz solely owned Fineline and that Shahryar solely owned Makino, despite the fact that Behruz had an ownership interest in both companies. From the SEC announcement.
Thanks for the post syswizard. As a type of camel jockey, I feel like I should respond to your joke. 1) It made me chuckle. Alkaida...hehe 2) The vast majority of arabs live peacefully in America and contribute in a positive manner. 3) That being said, even leftists are becoming concerned with certain elements of Islam that are wholly incompatible with humanist western values. 4) At some point, Muslims and the West need to have a frank, open discussion about how the two groups can coexist peacefully. I don't want to live in Beirut and neither do you.
Amen to that and I apologize if I offended anyone on this site. And I definitely need to learn to spell Al-Qaeda correctly...thanks for that.
Haha. Look, I'm not even an arab. I'm not offended. All I'll say is that I've lived in countries with ethnic strife. You don't want to go down that road.
Returning to the topic. Suppose you are non pro. And then your trading evolution (not sure is te word is correct). Then you become a pro customer or what? And how it change they call you to warn you or something? Tx.
Javier, This is for equity/index options not options on futures. Your broker will alert you if you have to file. If you want to avoid it, you will have to keep track of the number of orders you enter. If you are an automated trader, you will likely want to file anyway to make two sided markets and avoid cancel fees. An automated system can enter more than 390 orders an hour even for one symbol.