• snooggums@kbin.social
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    1 year ago

    They were not real dollars and of course nobody was punished because the stock market is a casino where the house makes the rules on favor of the wealthy.

    • 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 🤷

          • livus@kbin.social
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            1 year ago

            OP’s article is quite good.

            It’s more likely that there were several factors in play, including Wadell & Reed.

            But if the market practices weren’t so flawed with HFTs, none of that would have caused what happened.

      • snooggums@kbin.social
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        1 year ago

        Value of stocks is what they think people will pay, but if nobody wants to buy they are worth nothing. If stocks can change in value in fractions of seconds, they have no actual monetary worth, so nothing was lost and nothing was gained during this dip and recovery.

        Blah blah if you squint enough the same is true of paper money and lending, but that at least has some monetary banking while stocks are purely at a moments whim.

        • Dark_Blade@lemmy.world
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          1 year ago

          You see, the problem with your argument is that stock isn’t money, it’s an asset. While you can call the asset itself bogus, the money backing it is ‘real’; that’s why entire life savings can be wiped out if the market suddenly goes ‘kaput’.

            • Dark_Blade@lemmy.world
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              1 year ago

              Stocks aren’t money to begin with, they’re an asset class. The money invested in stocks is as real as any other dollar though.