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(CNBC)   How one alcoholic broker managed to gain control of 69% of the global oil market and spike the price, in just few late night hours of trading while drunk   ( divider line
    More: Scary, Financial Services Authority, electronic components  
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6299 clicks; posted to Business » on 28 Sep 2012 at 1:03 PM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»

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2012-09-28 11:11:34 AM  
4 votes:
If the guy had made their company 20 million dollars, he would be a trading legend at the water cooler and have gotten some 2 million dollar bonus. There would be rumors like "Dude that guy spiked the oil market at 2am on a drinking binge and pulled in 7 figures for that shiat."

Since he lost money on his bet - OMGZ ROGUE TRADER!!

And once again a complete lack of corporate accountability.
2012-09-28 02:53:12 PM  
3 votes:
So this guy tanks 10 million dollars and farks with a critical world asset, and all he gets a 116k fine???? And he can get his licence back later???

Some kid with a half a baggie of weed gets three years and a ruined life.

Yeah, the justice system is just perfect. No bias to upper class white males at all. nope.
2012-09-30 03:35:00 AM  
1 vote:
It's a catch-22. Making millions off a trade of a hundred million or so is what they're paid for. Most markets move around 1% in the average day. Do that over and over again, bat over .500, and you win. (More realistically, do it over and over again, keep your losses to 0.5%, and let your winners ride to 1.0%, and you only need to bat .333 to win.)

The time required to have a superior sign off on every trade would be prohibitive. Breathalyzer locks are a nice idea in principle, but even though the era of the three-martini lunch is mostly over, the fact remains that more intelligence is gathered over lunch/dinner than most would like to admit. That notwithstanding, these guys don't exactly sleep. When some dude on the proverbial graveyard shift punches in an extra "0" (or ",000"), nine times out of ten he can probably back his way out of the trade before anything goes terribly wrong. If it actually moves the markets, half the time it works out in the trader's favor, and the other half the time it doesn't, but the damage is minimal and it gets chalked up as a losing trade. What happened here, where the markets moved against the trader while the trader was unwilling/unable to back out of it, is like the case where the coin landed on its edge. Toss a million coins a day, something like this is guaranteed to happen every few months.

The system's more than robust enough to handle the occasional drunken fatfingering of the order button. To demonstrate just how robust, it ate up Knight Capital's bucket of fail 2 months ago with barely a hiccup, which was kind of a pleasant surprise given how hard it failed during the flash crash of 2010. The only victim of that particular hour of stupidity was KCG.

Don't worry about the drunks trading thin/illiquid markets after-hours. Worry about the robots that are supposed to provide liquidity up until the nanosecond that they all decide to stop providing liqudity. And even then, don't worry too much. It's a casino, but in a poker room, the house doesn't really care who wins, as long as it takes the rake.
2012-09-29 02:48:35 AM  
1 vote:
2012-09-28 01:54:08 PM  
1 vote:
THIS is why we should have a .5 cent tax on speculators.
2012-09-28 01:52:44 PM  
1 vote:
Was he butt-chugging?
2012-09-28 01:33:03 PM  
1 vote:
Only $520 million bought 69% of the global oil futures market?
2012-09-28 01:07:45 PM  
1 vote:
Just imagine what thousands sociopaths drunk on greed can do!

Oh wait, we don't have to imagine.
2012-09-28 01:06:53 PM  
1 vote:
Free Markets!!!

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