A high-tech SME scam. Trader = victim? - page 3
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In order to move the price, you do not need to buy hundreds of contracts, the limiters will come up trying to find the equilibrium price. This is the essence of a market maker's job.
A very good article. But it diverges from practice. It is clearly not the grain producers, wholesale buyers, processors, and exporters and importers who trade on the CME GLOBEX electronic corn trading platform, because you cannot really get a futures contract on the electronic platform . It is not held in a depository like a stock. If you buy a futures contract and do not sell it by the expiry date, your transaction will automatically be closed and you will not face a lawsuit from the seller. The speculators who trade there are the same speculators who, as the article says, "stand on the sidelines".
I think that producers, factories, exporters and other serious buyers and sellers have separate terms for deals... And the price of goods does not jump by hundreds of points in a matter of minutes.
How do you know that there will be no delivery?
SOT reports that are issued once a week show how many speculators, non-commercial traders and commercial traders (hedgers-producers and buyers of raw materials, who insure delivery against price fluctuations)
You're getting wise. Imagine you have limiters in both directions at the same time. What are you looking for when you move the limiters in the cup? You want to be in a position where the number of sales equals the number of buys. This is the equilibrium price and your profit as a market maker is maximal.
In order to move the price, you do not need to buy hundreds of contracts, the limiters will come up trying to find the equilibrium price. This is the essence of a market maker's job.
Imagine you are in charge of the CME.
All traders make their trades with you. You have all the data on all positions.
You open two accounts. On one you only buy, on the other only sell. If you trade only with yourself, you are just moving money from pocket to pocket. You have a lot of money and you put hundreds of limiters in a cup on both sides. You wait.
Small traders come in and open single positions. You sell and buy with them making small deals on a couple of contracts. You get a few people who open sell positions. They wait... They cannot move the price. Even if one hundred people simultaneously short 300 contracts, the price will not move because you have bid on 350 contracts.
Then you decide to move the price. You make a deal with your other half for 350 contracts and the price moves a point against several traders' positions. They are already down. You're on the plus side. You don't just move your money from pocket to pocket, you are already moving their money into your pocket because they made the deal with you...
Where does this information come from that there will be no supply?
The SOT reports that come out once a week show how many speculators, non-commercial traders and commercial traders (hedgers-producers and buyers of commodities who insure supplies against price fluctuations)
There have been moves that break all the concepts of technical analysis and establish new rules of the game, the main one being: "at any moment, there could be a super-fast mega price movement that will knock all the stops off first at the top, then at the bottom (or vice versa), and will do it in a fraction of a second".
Try to assume that this movement MUST happen, and you know how it will happen.
try to build on the fact that this movement MUST happen, and you know how it will all happen.
At one time I decided to adapt to this system.
To do this I had to calculate the current open interest. I studied TWS API, connected to it via NINJA TRADER and wrote a small program that read the data coming from the cup. My task was to find open positions of regular traders, calculate them, catch the moment when it was profitable for a trading robot to move against them, and at that moment automatically open a position and move with it.
If there is a sufficient margin in positions, then you can be sure you will earn some points every time you open enough positions in one direction. Unfortunately, the program was not completed because I faced an obstacle in the form of fake deals performed by the robot that veiled trades of traders. Probably, it is possible to bypass this problem and calculate real open interest, but I gave up and moved on to other things...
This nonsense happens on any active quote.
Perhaps there is someone who can explain and dispel my suspicions.
This nonsense happens on any active quote.
I don't think I can scatter, but I can sow.