# Proof of market manipulation



## Gringotts Bank (26 April 2016)

I now have proof of illegal manipulation on a stock I own.  Unfortunately didn't take a screen video... not that it matters really.  

But I also am well aware that ASIC are not interested in enforcing the law.

Any suggestions?


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## skyQuake (26 April 2016)

u can't make a thread like that and not expect us to ask for ticker/time


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## pixel (26 April 2016)

skyQuake said:


> u can't make a thread like that and not expect us to ask for ticker/time




you beat me to it, skyQuake 

Another comment I'd make about ASIC's failing to step in: What is new? The Powers That Be - at least till July 2nd - don't want Financial Markets to be scrutinised. Hence ASIC's Budget cuts and no RC on Banks.


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## CanOz (26 April 2016)

pixel said:


> you beat me to it, skyQuake
> 
> Another comment I'd make about ASIC's failing to step in: What is new? The Powers That Be - at least till July 2nd - don't want Financial Markets to be scrutinised. Hence ASIC's Budget cuts and no RC on Banks.




I thought ASIC was going to get 125m more in their budget?


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## pixel (26 April 2016)

CanOz said:


> I thought ASIC was going to get 125m more in their budget?




maybe you missed this:
https://www.choice.com.au/money/fin...les/asic-budget-cuts-taking-their-toll-110216



> Hands-off policing
> 
> The reduction in resources has forced ASIC to take a more distant approach to its job in some cases. Since the cuts took effect, there has been *a 43% decrease in the kinds of high-intensity surveillance activities *in which ASIC auditors pry open and scrutinise the operations of investment banks, superannuation funds and other ASIC licensees to make sure they're following the rules.
> 
> ...



(Bolds mine)


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## Gringotts Bank (26 April 2016)

I don't want to say.  But what happened is this:

- stock in open auction period, has a buyer surplus and is due to gap up 2 points
- The top lines are all looking a bit thin, which is always suspicious
- seconds prior to open, bids get pulled (very common and will never be punished - must be insto because who else can time it to the second like that?).
- After the official open (opens flat - surprise, surprise), nothing happens for a good 5 minutes.
- I see a chunk of stock I want to sell into on the top bid
- I look at the clock for the exact time, hit sell and the exact number of shares on the bid disappears (shows as "sold" on the course of sales), 1 second before my sell is registered as placed.
- About 1/3 of my order gets eaten, presumably by dark liquidity, and the rest gets plonked on the top offer line.
- Top bid is now 1 tick below where it was when I pressed sell.

I realize there's a possibility of another explanation, but when 1/3 of my order was eaten by offscreen activity at the exact same time (minus 1 second) when all had been quiet?  More worrying is that I've seen this happen a lot during auction periods where they manipulate the depth in order to force buyers/sellers to accept one tick more/less.


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## skyQuake (26 April 2016)

Gringotts Bank said:


> I don't want to say.  But what happened is this:
> 
> - stock in open auction period, has a buyer surplus and is due to gap up 2 points
> - The top lines are all looking a bit thin, which is always suspicious
> ...




Does your course of sales show your order hitting TM (asx) or Chi-x first? Also was the bid wholly TM or mix of chi-x and TM?


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## Gringotts Bank (26 April 2016)

skyQuake said:


> Does your course of sales show your order hitting TM (asx) or Chi-x first? Also was the bid wholly TM or mix of chi-x and TM?




My trading is all ASX, but I don't have access to the other info unfortunately.  I guess I could ask my broker, but they aren't great with customer service.


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## CanOz (26 April 2016)

pixel said:


> maybe you missed this:
> https://www.choice.com.au/money/fin...les/asic-budget-cuts-taking-their-toll-110216
> 
> (Bolds mine)




its funny how the media just touts around what it wants to....pathetic...

Thanks Pixel


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## pixel (26 April 2016)

Gringotts Bank said:


> I don't want to say.  But what happened is this:
> 
> - stock in open auction period, has a buyer surplus and is due to gap up 2 points
> - The top lines are all looking a bit thin, which is always suspicious
> ...




I doubt ASIC would even classify that as manipulation.
Nor would any judge accept it as "proof".

Who is going to tell that it wasn't coincidence? Or that a 'bot detected your offer coming in and reacted? That seems to me the most likely explanation: The largest instos have their algo trading boxes right next to the ASX's trading computer, even with high-speed priority network connections at exactly the same cable length as each other, so they don't have a fraction of a nanosecond advantage over their next competitor, but will beat the average online punter (i.e. you and me) by hundreds of milliseconds.

That aside, I have a suspicion - *not proof!* - that some of the bigger online brokers may keep an eye on incoming retail orders and "Review" them by just those few seconds it takes to notify an interested, full fee-paying party of an upcoming opportunity. Maybe that's not completely ethical, but a "Review" is completely within the rules, maybe even mandatory in certain situations.
Also: Have you ever come across the term "Stop Raid"? That's where someone with access to an online broker's conditional orders can determine how much it would cost to trigger an avalanche of stops and buy at the "right" low price. Has been observed ever since the early days of online trading.


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## Gringotts Bank (26 April 2016)

pixel said:


> I doubt ASIC would even classify that as manipulation.
> Nor would any judge accept it as "proof".
> 
> Who is going to tell that it wasn't coincidence? Or that a 'bot detected your offer coming in and reacted? That seems to me the most likely explanation: The largest instos have their algo trading boxes right next to the ASX's trading computer, even with high-speed priority network connections at exactly the same cable length as each other, so they don't have a fraction of a nanosecond advantage over their next competitor, but will beat the average online punter (i.e. you and me) by hundreds of milliseconds.
> ...




What do you mean a bot detected my offer coming in??!  That's front running and highly illegal.  All they are allowed to do by law is predict when the next activity _*might *_happen based upon historical trends, and as I mentioned, the stock is thinly traded and was just sitting there motionless.

We seem to have very different standards as to what constitutes ethical.  Straight through processing means *straight through*, unless the order is unusual.  And it wasn't.


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## pixel (26 April 2016)

Gringotts Bank said:


> What do you mean a bot detected my offer coming in??!  That's front running and highly illegal.  All they are allowed to do by law is predict when the next activity _*might *_happen based upon historical trends, and as I mentioned, the stock is thinly traded and was just sitting there motionless.
> 
> We seem to have very different standards as to what constitutes ethical.  Straight through processing means *straight through*, unless the order is unusual.  And it wasn't.




Our ethical standards are the same, GB;
Even though I play the Devil's Advocate, I'm fully aware who the Devil is and what really happens.
I don't say I condone front running or playing favourites depending on who pays how much.
But I've been around the traps and observed human nature for long enough to recognise *reality.*
Some behaviour being legal doesn't mean it's just and ethical. And a defense lawyer wouldn't raise a sweat arguing everything was done by the book. 

I had the first stop raid done to me late last century: similar case as yours, except that in those days we still had to phone the orders through to a broker who owned a "seat". Thinly traded option, and I added a stop level, as we were urged to do in order to preserve our capital. Of course, I got my buy order filled. Only trade that day. Next day, two buy orders vanished and my stop was executed. On Day three, the Mother came out with breaking news and the option went ballistic.
A week later, I had changed to a different Broker.


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## Gringotts Bank (26 April 2016)

pixel said:


> Our ethical standards are the same, GB;
> Even though I play the Devil's Advocate, I'm fully aware who the Devil is and what really happens.
> I don't say I condone front running or playing favourites depending on who pays how much.
> But I've been around the traps and observed human nature for long enough to recognise *reality.*
> ...




ok, good to hear.

I guess there is one built-in limit to the system, and that is this: if there is anyone making a killing (such as HF Traders), then all the instos will start doing it and that will eat away the edge.  There's not enough retail business in 10 years that would support such a process being profitable at our expense - they'd have to prey on each other.  And if they are preying on each other, there's yet another built-in limit, because when big players get jilted, they have the power to prosecute and make real changes to the law.  I'm going to remind myself of this so I don't get too fussed by what happened.


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## Gringotts Bank (26 April 2016)

ok, sorry for the serious thread.  Here's something a little more light hearted which was on tv last night.  If you're over 35 and Aussie, you'll find it hilarious.  He won the Melb Comedy Awards with this stand up performance.

edit[] http://iview.abc.net.au/programs/lawrence-mooney-lawrence-of-suburbia/ZW0672A001S00


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## skc (26 April 2016)

Gringotts Bank said:


> I don't want to say.  But what happened is this:
> 
> - stock in open auction period, has a buyer surplus and is due to gap up 2 points
> - The top lines are all looking a bit thin, which is always suspicious
> ...




This all sounds pretty part-and-parcel of trading these days. Without knowing the details of your particular transaction... it's hard to comment further, especially that you don't even know whether your broker is routing your orders to Chi-X or not.

Remember though.... if the "manipulation" causes you to sell for 1c less than what could have been, then someone else has the opportunity to buy at 1c lower than what they should have paid. May be it's a HFT hoping you'd reach down and hit the lower offer. But if you don't, they'd have to reach for your offer eventually to square their book... especially if it is a small, low liquidity name as you suggested.


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## So_Cynical (26 April 2016)

Gringotts Bank said:


> What do you mean a bot detected my offer coming in??!  That's front running and highly illegal.




Thought it was front running, all the players have colocation servers with the ASX and the other mob, they are always in front, its the new normal.


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## Wysiwyg (26 April 2016)

By accident I found I can trigger one of my custom indicators on a thinly traded stock. How I did it was sell my parcel in the closing auction but not until on the 10 minutes past cutoff and I ticked the price down below what was the indicative close price and triggered my indicator. Never seen myself do that before. Might try some price manipulation myself and get some of those common indicators triggered.  Alas I have not the funds to do it wilfully.


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## pixel (27 April 2016)

Wysiwyg said:


> By accident I found I can trigger one of my custom indicators on a thinly traded stock. How I did it was sell my parcel in the closing auction but not until on the 10 minutes past cutoff and I ticked the price down below what was the indicative close price and triggered my indicator. Never seen myself do that before. Might try some price manipulation myself and get some of those common indicators triggered.  Alas I have not the funds to do it wilfully.




I use that "trick" mainly to get the best price - either in the Open or the Closing Auction.
It does require an online broker who passes orders straight through instantaneously, not one that tends to "review" to see whether there's something "in it" for one of their better-paying clients. 
Being a small minnow in a big pond, I don't kid myself that I could credibly manipulate tomorrow's Open by creating a chart pattern others may accept as a signal. (Doesn't mean though that I won't ever buy 5 more shares or pull an order if that will lead to, say, a High Close. )


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## Gringotts Bank (28 April 2016)

Happened again today... different stock.  Exact same thing.

This is new, I reckon.  

How is anyone else not noticing this?  Don't you guys trade speccies?


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## CanOz (28 April 2016)

Gringotts Bank said:


> Happened again today... different stock.  Exact same thing.
> 
> This is new, I reckon.
> 
> How is anyone else not noticing this?  Don't you guys trade speccies?




Get a screen recorder and record it will you, i'd like to see this.


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## Wysiwyg (28 April 2016)

pixel said:


> I use that "trick" mainly to get the best price - either in the Open or the Closing Auction.
> 
> 
> (Doesn't mean though that I won't ever buy 5 more shares or pull an order if that will lead to, say, a High Close. )



Closing auction comment.
Yes the pricing can be very accurate down to a few shares on a higher or lower (than last price) close. Flitting back and forth as orders tip it one way or the other. It appears to be that the desperate sellers are squeezed for a lower than last trade price and also front running large buy orders, price will close that little bit higher.


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