Apparently, that was a real play by some smartie-pants trying to buy 4000 contracts on the release of Cisco's earnings... Story on pg 14 of current Futures Mag.
Darn straight I remember. I was short - and real fast to praise the righteous action by CME in breaking everything above 12 points Then I was long in the same mess that hit YM last month. I immediately burned some of my 300 or so points on some stupid double down trades and lost $500. I was a real big shot playing the house's money. So, I really enjoyed getting that bulletin from IB saying CBOT was going to handle it the same way. I was graciously allowed to keep the 500$ loss though. :eek: I'll pick up that issue at the mall today. Sounds like the guy intended a bona fide trade. Something is telling me this is going to happen more and more with the minis. Geo.
That guy was a real DUMB-ASS... (and unfortunately, there are surely more). How in the world could any sensible person expect to get a decent fill on 4000 contracts in the thin AH? Mind-boggling how stupid some people can be.
I read the story. It didn't say 1 guy. It said numerous orders were sent trying to make a play on the earnings news. The influx of large orders triggered a large number of stops which created a snowball effect. 4000 orders were filled and later busted. 398 orders were allowed to stand.
Since those incidents I found myself daydreaming a few times about the havoc that could be caused in the mini market after regular hours by 2 powerball winners with 2 computers and 2 fifths of whiskey. One a buyer - the other a seller. Geo.
I dream often of somebody filling my short ES orders that are way above the market. I always leave limit orders so high, in case some smart ass does something like what happened on 2/5. It is like winning a lottery, you gotta be in it to win it.
Can you imagine? Now, there are a couple of thousand contracts bid and offered about 50 handles away from the market each nite... JUST IN CASE!! Ha!
Right ! And can you imagine the war beginning AH and those shorts getting filled while the market moves up another 400 points before you get up in the morning?
The real problem here was that the Arbs did not do their job. The CME should take over the job of arbing during the 15 minute aftersession with a computerized arb. That way if the emini shoots up then the open-outcry (open-collusion) contract will also shoot up. Then it would be a valid move.
Couple of reasons why I disagree with this comment: 1. To arb, you need a buyer and a seller. If you were in the pit and looking to buy against the minis, who was going to sell it to you? (my guess is all offers vanished). 2. If you are sharp, you'd know about the 6 point rule and might find it to risky, selling a mini or a buying above the limits. 3. They did there job. The spike lasted 43 seconds before the market returned to its previous level. I think that's pretty impressive.