• Bernie Ecclestoned@sh.itjust.works
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    1 year ago

    They were real dollars, and this legend got house arrest for a year for helping to trip the algos limit orders, and briefly wiped 1 trillion dollars of value off the US stock market

    Sarao realised that the high frequency traders all used similar software. That made the market twitchy - like a flock of sheep, all moving in the same direction

    His software took advantage of this by placing thousands of orders before quickly cancelling or changing them, once he had created artificial demand for other traders to buy or sell that asset.

    This practice - known as “spoofing” - allowed him to make genuine buy or sell orders at a profit as the price swiftly rose or fell

    https://www.bbc.com/news/explainers-51265169

    • Kecessa@sh.itjust.works
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      1 year ago

      So the guy played with the system, doing things the system allows ,but because he wasn’t in the club he got punished 🤷