Comments by "irresistablejewel" (@irresistablejewel) on "The Wild $50M Ride of the Flash Crash Trader" video.

  1. Correct me if I'm wrong, please... There is a supercomputer that sits right beside the New York Stock market; it's used to "front-run" trades and if it detects a large order it places an order just before that and sells just after. There are a number of different names for this: it would be called insider trading if it was through privileged information, but another name is "skimming" (off the top). The kid from London (I'm told) was sending in large buy orders then cancelling them before they were actioned; the supercomputer was doing what it usually did, it put in an order but since the original order is cancelled it's the supercomputer that is raising the stock-price; then the kid would sell shares he previously owned at a profit. This "spoofing" of those skimming is the reason the American government wanted to make criminal charges; but this shows that the government are complicit in this and support those front running trades. The actual cause of the flash crash it was eventually revealed was a hedge fund that placed an order for $4.1 billion; but the American government has a track record of blaming outside forces (easier than working) so they looked for a scapegoat... but the problem is that the skimming mechanism would become public knowledge and it looks very much like dubious practice, even if they cut the government in on it. So in the version I heard he spoofed a bunch of skimmers and they ran to the government to call foul... it seems hypocrisy is alive and well and it lives very near Wall Street.
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