{"id":5943,"date":"2015-02-23T15:47:00","date_gmt":"2015-02-23T20:47:00","guid":{"rendered":"http:\/\/olduvai.ca\/?p=5943"},"modified":"2015-02-23T15:47:00","modified_gmt":"2015-02-23T20:47:00","slug":"the-oil-markets-are-rigged-heres-how","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=5943","title":{"rendered":"The Oil Markets Are Rigged – Here’s How"},"content":{"rendered":"

The Oil Markets Are Rigged – Here’s How<\/a><\/h3>\n

We have remarked numerous times, thanks in many cases to the detailed analysis of Nanex LLC, that oil markets (among others) are manipulated or rigged<\/a>. But, just as Michael Lewis was what equity market participants needed to comprehend what was occurring stocks,\u00a0so WSJ reports today<\/a>\u00a0on\u00a0‘spoofing’ in the oil markets<\/strong>. Spoofing is rapid-fire feinting, which as Tabb group’s Matt Simon notes,\u00a0“raises a question now about whether someone is engaging in legitimate market activity or clear market manipulation.”<\/em><\/strong>\u00a0Here’s how they do it…<\/p>\n

Ironically,\u00a0the last time we commented on this was the day after The SEC charged another trader (and his machines) with spoofing<\/a>.<\/p>\n

But, as The Wall Street Journal reports, it continues…<\/a><\/p>\n

\n
The 2010 Dodd-Frank financial-overhaul law outlawed spoofing, but the tactic is still being used to manipulate markets, traders say.\u00a0\u201cSpoofing is extremely toxic for the markets,\u201d<\/strong>\u00a0says Benjamin Blander, a managing member of Radix Trading LLC in Chicago.\u00a0\u201cAnything that distorts the accuracy of prices is stealing money away from the correct allocation of resources.\u201d<\/strong><\/div>\n

CME, the world\u2019s largest futures exchange, put out rule clarifications in August 2014 intended to end spoofing.<\/p><\/blockquote>\n

Here’s how it works…<\/p>\n

\n
Spoofing is rapid-fire feinting.\u00a0<\/strong>A spoofer might dupe other traders into thinking oil prices are falling, say, by offering to sell futures contracts at $45.03 a barrel when the market price is $45.05. After other sellers join in with offers at that lower price, the spoofer quickly pivots, canceling his sell order and instead buying at the $45.03 price he set with the fake bid.<\/div>\n

 <\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n

\u00a0<\/span><\/b><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The Oil Markets Are Rigged – Here’s How We have remarked numerous times, thanks in many cases to the detailed analysis of Nanex LLC, that oil markets (among others) are manipulated or rigged. But, just as Michael Lewis was what equity market participants needed to comprehend what was occurring stocks,\u00a0so WSJ reports today\u00a0on\u00a0‘spoofing’ in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[503,3720,2245,3718,3719],"class_list":["post-5943","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-market-manipulation","tag-market-spoofing","tag-oil-market","tag-rigged-market","tag-spoofing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5943"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5943\/revisions"}],"predecessor-version":[{"id":5944,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5943\/revisions\/5944"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}