In June 2012 the Chicago trader Igor Oystacher nicknamed Russian oil futures traded on the London Stock Exchange. For six hours with his computer took 23 000 teams, including thousands of orders to buy and sell. Most of them Oystacher canceled within milliseconds.
Such a strategy in which a trader makes a lot of orders and immediately cancels them, called spoofing. Since 2010 it is prohibited in the United States. For markets, it is very toxic, explains managing partner of Chicago-based Radix Trading Benjamin blender. The world's largest futures exchange - a Chicago-based CME Group - issued a clarification in August, she will fight spoofing. In February, as did its main competitor - Intercontinental Exchange (ICE).
For spoofing is difficult to prosecute, because there may be legitimate reasons for cancellations: traders do when the movement of prices, or to hide the size of the order, market makers - when supply and demand change.
In 2014, criminal charges of fraud and spoofing the high-frequency trader Michael Koshia. He, according to prosecutors, earned $ 1.6 spoofingmillion. Koshia admitted guilt, but has agreed to pay $ 2.8 million to settle charges by the US-term Trading Commission (CFTC).
Former Muscovite Oystacher in 1999 went to the University, but did not finish my studies and began working in the Chicago trading firm Gelber Group. For a year he learned that, on that other takes 3-4 years, says his former colleague. Aggressive style Oystachera was known outside Gelber. "He is spoken for a long time", - said a Chicago broker John Lothian.
In 2010 Oystacher from Gelber left, and in 2013 CFTC fined the firm $ 750,000 for the actions of an unnamed trader, who in 2009-2010. I made orders and canceled them.
In 2011, Oystacher and his colleague at the Gelber Edwin Johnson founded 3Red Group. According to CME, in 2010-2011. Oystacher repeatedly opened huge positions in silver, gold, copper and oil, quickly closed them and opened the opposite. In November 2014 CME fined him $ 150,000 and banned the trade during the month.
Oystachera transactions in oil futures in June 2012 attracted the attention of ICE Europe. She asked the Advantage Futures clearing company documents about the transactions and explanationx meaningless. In response, she received an Excel spreadsheet and an explanation Oystachera: "We click-click, when we see something, and if we click faster than anyone, so we more professional." ICE did not accept the explanation and ordered to stop Oystacheru "manipulative behavior".
Johnson in August 2013 left 3Red, he claims that he was concerned about spoofing in June 2013 because of the inspection. He was dismissed for theft and fraud, the lawyers argue Gardiner, Koch, Weisberg & Wrona - the firm Johnson accused that she helped Oystacheru illegally fire him. Because the claim was reported that CFTC checks and transaction Oystachera 3Red in 2011 to a claim accompanied by a copy of the agreement, which concluded with Johnson Oystacherom after dismissal. He received $ 200,000 immediately and $ 250 000 in August 2015, but if Oystachera or 3Red fined $ 1 million or more, or if it is forbidden to trade five or more months, payments cease.
HOW IT WORKS
The trader submits an application to sell futures at $ 45.03 per barrel, with the market price of $ 45.05. When the same price put the other players, the trader cancels the order and buys futures at $ 45.03. Then he applies forpurchase for $ 45.04, waiting for other applications, cancels and sells his futures.