Large traders revealing positions should be illegal...

Discussion in 'Trading' started by RangeTrader, Jul 18, 2012.

  1. Because it bolsters their positions depending upon their level of influence. It's an ethical problem.

    Disclosure of positions is hilarious because for the big players it causes the market to shift more in their favor because the smaller players chase after them.

    Look at when we put in the market bottom a few months ago... One of the main reasons traders were bullish was because someone had bought 150 mil worth of spy calls... Then on the pre-EU news there was news of a 60,000 car market buy. Price action is the main influence on the movement of price... And thats normal.


    But, like when warren buffet makes a big investment in some company and then it ends up on the news... Everyone comes rushing into that company and it helps shift the stock in his favor even more.

    Anyone else have any thoughs on this?


    Here is a quote from the book "Pit Bull."

    "Eventually, they got to oil futures and I thought that this discussion
    would be pretty interesting because the price of oil had
    been plummeting. It was trading at $12.50 a barrel, the lowest
    it had ever been since the formation of OPEC, and nobody
    seemed to know why. There was speculation that the CIA might
    be putting pressure on the Saudis to flood the market in order

    to help our balance of payments, or maybe just to needle the
    Russians, or the Iranians, or the Iraqis, or all of them; who
    knew?

    To talk about oil, Easton called on some porky cowboy from
    Texas. To me, the guy looked like Billy Tex Bunghole. He was
    wearing boots and a spangly silk shirt that was open halfway
    down the front. A big gold chain hung around his neck and
    attached to it was a gold medallion that dangled on his furry
    chest. His porky face was beet red and he was sweating. "Seems
    lak to me," he drawled, "over the nex six months, the prass of
    West Texas crewed is headin' down anotha six dollars a barrel.
    Ah mean to tell you boys, those wells are pumpin' lak a two-dollar
    hooker on a Sahdy naht. We've got awl comin out our ass.
    In six months, we ain gonna be able to give it away."

    "Thank you, Tex," Bob said. "Now let's hear what's happening
    in the European market." He called on a dapper little
    Frenchman. This guy was thin and effete, and wearing a tailored
    blue serge suit, custom-made shirt, and Hermes tie. "In
    zee next five years," Pierre Le Flit crooned, "zee supply of oil
    will far outstrip zee demand in I'Europe."

    When Pierre finished, Helmut Weymar caught me by surprise.
    "We're fortunate to have Marty Schwartz with us
    tonight," he said. "Marty's a new trader with Commodities
    Corp, one who's doing very well for us. Marty, what do you
    think about what you just heard?"

    I puffed out my chest a little. I didn't trade crude oil much,
    but I decided that this would be a good chance for me to shake
    things up a bit. I was the new dog at the hydrant and it was time
    to lift my leg. "Helmut," I said, "I appreciate your asking me
    down here tonight, but I'm something of a heretic. I don't know
    what the supply and demand of oil's going to be in Europe in
    the next five years and I don't know what the price of West
    Texas crude's going to be in six months and, frankly, I don't
    care. I'm a mark-to-market trader, all I want to know is what the
    price is going to be tomorrow, and I've got to tell you, when I
    posted my charts, checked my stochastics, and calculated my
    ratios just before I left the office today, oil was above my moving
    averages. As far as I'm concerned, oil's in a positive mode.
    The Commodities Corps Semi-Annual Trader's Dinner wasn't
    over until after eleven, and by the time I got home, I was too tired
    to go over my charts. The next day, I was paying for it. I was constantly on the wrong side of the market; I was tired and way out
    of sync. At midmorning, the phone rang. It was Harry Denny
    from Shearson. "Marty," he said, "have you seen the price of oil?
    It's going crazy." I punched oil up on my screens. The Dec 88's
    were at $13 a barrel and climbing. Tick, $13.10. Tick, $13.15.
    "Fuckin' unbelievable," I said. "We talked about oil at the
    Commodities Corp dinner last night. I said it was going up, but
    I was just yanking their chains."

    I forgot about oil and went back to my own trades. I was
    down a bundle on S&P futures. The next day, Harry called me
    again. "Marty," he said, "you watching oil? Sheik Yamani must
    have ordered OPEC to turn off the spigots or something. It's
    heading straight up." I punched oil up on my screens again.
    Tick, $14.30. Tick, $14.35.

    When oil hit $15 the following day, it finally dawned on me
    what was happening. It wasn't Sheik Yamani who'd driven the
    price up 20 percent in three days. It was Sheik Schwartz, the
    kid from New Haven, who'd done it. What I should have realized
    was that if 50 percent of the pooled commodities money in
    the country was sitting in the same room at the same time, a lot
    of it was in oil, and most of it was short. When Sheik Schwartz
    said that his charts showed oil was in a positive mode, it was
    like yelling "fire" in a crowded room. Now these guys were frantically
    trying to cover their positions. I felt like kicking myself."



    The biggest and best traders in the country who are the most influential can really move markets by the words they say.
     
  2. It helps them when they're right. But what happens when it goes against them and they want out?
     
  3. Heres the weird part about all of this...

    Authorities are worried about influential people who don't disclose their positions and using their influence to move markets...

    But in reality, them disclosing their positions with the proper timing helps them the most.

    Depending on the person the effect may be small or it may shift momentum quite a bit.


    Does anyone know if Ben Bernanke holds any stock positions? He has managed to set stock market trends for upto ten months at a time... LoL!!!
     
  4. If a big player knows another one is stuck in position... They will likely go on the offensive if they think they can blow them out.

    Has happened many times. That's another issue with position disclosure.


     
  5. Agreed. It's definitely a two way street. If anything the disclosure of a massive buy might work against whoever is doing it because there are good odds that they aren't just dumping it the next day. On the other hand, look at 2008 or even late last year and some of the big names that were exposed when the market literally disintegrated and these guys had minimal liquidity in their positions to offload into.
     
  6. In your journal you alluded to the opposite - that The Market likes to move against a known large position, hoping to blow it out.

    Are you a large trader with little influence, or just leveraged up?
     
  7. hoop121

    hoop121

    Icould be wrong, but I thought that most large stock purchases like what Buffet does are often negotiated at much different prices than the spot price anyways. And they typically will have restrictions on them for when they can sell it. So even though the stock might run up after the news of the purchase is released the market will eventually move back to it's intrinsic value before the large trader can exit the position, anyways.
     
  8. "Large traders revealing positions should be illegal..."


    Do we really need to entertain stupid regulations such as this?

    Next thing you know it will be illegal to peak at my charts:eek:
     
  9. d08

    d08

    The large traders buy politicians (=laws and regulation).
    I think many here don't understand how corrupt the markets are.
     
  10. r-in

    r-in

    A good friend was shaken out of 2 stocks this week after CNBC had 2 different clowns on promoting their short positions, and how they knew they were right. Both took a hit and took his stop. They both are back above his entry and well off the hit from these ass clown promoters.
    What I don't get is how these guys and CNBC aren't the same as the kid in an internet chat room pumping and dumping? I don't mind buy/sell recommendations, but people with huge positions, especially when they are in the hole, should not have any leeway about promoting their positions.
     
    #10     Jul 19, 2012