And he had a separate account that would trade the market distortion.
His big orders weren't the best bid or ask. They were a few orders deep in the market.
Basically people and machines would jump further in front of the big buy or sell order with their own orders, and move the price in a direction. His smaller account would make profits from those trades.
Yes you could affect trillions of dollars of derivatives and the sentiment of the entire market with just a few dozen millions.
It is still a widespread practice and tough to prove. But spoofing was made illegal in the Dodd Frank Act. So if the government can nail some easy cases and create case law, then they could think about going after the banks that do it. Emphasis on think.
And he had a separate account that would trade the market distortion.
His big orders weren't the best bid or ask. They were a few orders deep in the market.
Basically people and machines would jump further in front of the big buy or sell order with their own orders, and move the price in a direction. His smaller account would make profits from those trades.
Yes you could affect trillions of dollars of derivatives and the sentiment of the entire market with just a few dozen millions.
It is still a widespread practice and tough to prove. But spoofing was made illegal in the Dodd Frank Act. So if the government can nail some easy cases and create case law, then they could think about going after the banks that do it. Emphasis on think.