+1 http://www.elitetrader.com/vb/showthread.php?s=&threadid=249736 http://www.elitetrader.com/vb/showthread.php?s=&postid=3065159&highlight=spoofing#post3065159
how is it giving a false view of the stock, but the market maker quoting non competitive spreads isn't? if you've spent any time in etfs after hours, or illiquid ones at any time, you've seen how market makers will try and make the widest spread possible. which is fine, good on them, they should be allowed to. however, if you want a fair competitive price to trade at, how exactly do you get one? quoting mid or better will rarely get you hit when there's little trade interest, and will usually have the opposite effect of causing that contra-side mm to back away and widen even further. when the only way to trade is to pay the spread, i don't see how figuring out where the best price the mm is willing to quote should be illegal. as of now, the only way to do that is to walk up their quotes to find their best price. it's like an indicator of interest. if you didn't and paid the non-competitive spread, who exactly is manipulating who?
If you go on ebay and have 5 of your buddies bid a shirt you put up for sale up to 100 bucks and as soon as that sucker comes in and bids 101(for a shirt worth 10 bucks) your buddies YANK their bids you have created a false market! The point here is exploiting the stock market is illegal, if you would like a full detailed explanation call the sec and im sure they would be willing to give you that info in detail.
it is obvious that u have never dealt with the sec with a serious inquiry. the last line of your post made me laugh. lawyers have made tens of million off this gray area.
My name is George Soros, I want to sell 500k shares of Mittal Steel, MT at 16 dollars. It is too low for me right now, I subsequently beef up the bid in order to induce people to take me on the offer. You are welcome to hit me on the bid if you want, but my analysis tells me a buy algo will trigger at this price, filling my order. Is this illegal? If it is, then stop trading now, because this happens every single day in the markets. Only plebs who have no idea how to read the L2 will claim this is "illegal". My guess is some guy's algo got seriously fucked up in GNW and went crying to the SEC.
your analogy to counter my example, isn't apples to apples. i'm not talking about a sucker. i'm talking about a designated mark maker making uncompetitive markets (a sophisticated market participant) who doesn't quote unless he can make money on the trade. making your example apples to apples, would be if you DIDN'T have your 5 buddies come in, then you would HAVE to sell to the guy who always comes in on low demand auctions and bids a penny. who's the sucker now? why don't you think about and try and answer to yourself some of the questions i raised? what tools does someone have in our markets to ensure market makers are quoting fairly and competitively? what tools do we have to ask for a better price?
If you read all my posts, they both do it illegally! Neither is more right than the other. Sounds like you just dont get it, this isnt the first time or the last! Watch this bing link on the whistle blower to the big institutions. BTW the sec is coming out with a CAT system for real time surveillance to monitor quotes after the flash crash, system was flawed and being corrected. The gimmicks we had in the mid to late 90's were far worse than today's manipulation . Sounds like your learned the markets the wrong way, learn to chart, pick good companies and you will make a nice living
its all bullshit and I fail to see how it can be called illegal per the constitution. if somebody wants to hit all the bids those fake bids become real instantaneously. If the sec wanted to stop the bullshit... they should make a rule about cancels. Or perhaps saying all bids and offers must be good for 5 seconds.