That's not really it at all. Spoofing is pretty easy for the CME market compliance group to track and monitor and it's not nearly as subjective as you suggest. CME has brought at least a dozen cases that I've seen against both independents (individuals) and big trading firms. All electronic trading exchanges monitor the message-to-fill ratios of each tagged participant - they've been doing it since the early 2000's. The order book bias, extreme sizing changes, and cancel/replace frequency for a spoofer leaves a totally different electronic footprint than your typical automated trading platform or algo.
I appreciate your opinion on it @bone , it just seems like it has the potential to be very subjective to me. I can see if it's overboard like what you're saying, but more marginal cases would be a lot less clear, I think. Especially in the case where you're simply taking the other side of the trade on new information. There's less legitimate reason to be changing sizes, though again I could see an honest algorithm doing this if it senses change in risk/reward.
Well in your example eves, wouldnt one have to produce the code, and the code would be tied to new info coming in assuming its not spoofing? i mean theoretically. what i hate even more that that is the almost certain slective application by law/securities enforcement. markets go nuts? haul off some poor introvert hermit trader in England to jail. Meanwhile traders at all tge big firms continue to do the same thing over and over and over.
Your worries are unfounded. Real legitimate spoofing activity is nowhere close to 'marginal'. The order book activity for malicious spoofing is very obvious. https://www.reuters.com/article/us-...er-fined-suspended-for-spoofing-idUSKBN1HG39K
Again, the exchanges monitor message-to-fill ratios very closely. http://www.chicagotribune.com/busin...er-spoofing-plea-0603-biz-20170601-story.html
Nope - they're going after the big banks with HUGE fines and sanctions. $10M US is a pretty big fine all things considered. This is serious. U.S. CFTC to fine UBS, Deutsche Bank, HSBC for spoofing, manipulation: sources https://www.reuters.com/article/us-...r-spoofing-manipulation-sources-idUSKBN1FF2YK
Thanks bone. But isn't $10mm chump change these days with the numbers these investment banker, etc. traders are throwing around? Why did they charge the guy from the UK or what not with a crime, he will probably not see the light of day, but charge the big banks slap-on-wrist penalties in the low mils? I'm no expert in this stuff, so I could be wrong on alot or all of it. Just repeating what I read elsewhere here on ET. Thanks!
1 1. A $10M fine is the largest that I’m personally aware of coming out of a regulated futures exchange. The fact that UBS, HSBC, and DB could lose access to CME if they do it again is not a small matter. 2. Take the time to actually read in detail the actual CFTC complaint and response against Sarao. While I’m not a judge and can’t say that he deserved prison time, I can say that he most definitely manipulated the market to the detriment of other participants over a protracted period of time. Again, read the details in the complaint. 3. I literally watched European Banks blow up the Dax and manipulate the German Treasury Markets on Eurex - and they didn’t do anything. Probably because the Banks owned a chunk of Eurex.