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Posted by Qem 2 days ago

Grand Theft Oil Futures: Insider traders keep making a killing at our expense(paulkrugman.substack.com)
506 points | 326 commentspage 2
hatradiowigwam 1 day ago|
Welcome to the world of commodity trading. There is no SEC here, and this is business as usual. You can look at T&S to see this for yourself, but this is (like it or not) how this typically goes in commodity markets.
declan_roberts 1 day ago||
Commodity trading is managed by the Commodity Futures Trading Commission CFTC and a criminal probe into this started last month.

https://www.reuters.com/business/energy/us-probes-suspicious...

utopiah 1 day ago||
Does the SEC even matter anymore with the current administration?
ruilov 1 day ago||
I'd like to see the base rate. Ie were there similar bets at similar times when Trump did not make an announcement
scrivna 1 day ago||
Look at Adobe stock 10 minutes before the Claude Design announcement came out… the volume spike there is out of the ordinary and I find it hard to believe it’s a coincidence, someone knew something. The level of blatant insider trading at the moment is pretty wild
sagebird 1 day ago||
same, without context it is speculation. even with context, if the person creating the story controls the window, a window can be found which supports the story.
harvie 2 days ago||
Can you watch what happens on a market just before the press conference and do the same?
gizajob 1 day ago||
By the time you’ve reacted, it’s already too late.
bell-cot 1 day ago||
This, as a generality. There are plenty of multi-billion-dollar Wall Street firms doing algorithmic trading. Your prospects for being smarter or faster than them are very poor.
organsnyder 1 day ago|||
You'd risk amplifying every fluctuation. It's often impossible to know what's a shift vs. what's noise until it's well under way (if not over).
gwerbin 1 day ago|||
I've heard of this working in other kinds of markets, where if you can identify the traders who consistently beat the market, and you can emulate them with precise timing, then you can beat the market too.
vasco 2 days ago|||
These were before news reports that came out with the scoop before any press conference. How would you know that some big news scoop is going to drop? You'd have to jump on every futures drop.
cosmicgadget 1 day ago|||
> At 3:40 AM ET today, nearly 10,000 contracts worth of crude oil shorts were taken without any major news... At 4:50 AM ET, just 70 minutes later, Axios reported that the US is “close” to a “memorandum of understanding” to end the Iran War.

Depends on what your brokerage allows, see timestamps.

gilrain 2 days ago||
Eager to make bank off the back of civilisation, too? My IT colleagues continue to impress!
vavos 1 day ago|||
Civilization will be effected the same way anyway, why not make a buck of it? But you wouldn't be able to anyway because some quant's ml model would have already sucked every dollar out of the opportunity two milliseconds after the insider executed the trade
2ndorderthought 2 days ago|||
Psychopaths and sociopaths come from all types of backgrounds. One things for sure, they all tend to gravitate towards power and exploitation of people without remorse. C suite and founders are far from immune from this...
blitzar 1 day ago|||
> far from immune from this...

Its a pre-requisite for the job

deaux 1 day ago|||
> C suite and founders

You missed "VC backed" in front of "founders". Most founders are good people.

lvl155 1 day ago||
Unfortunately insider trading happens all the time in commodities and isn’t necessarily illegal. It depends.
mannanj 1 day ago||
So, basically, over the last century or more or so, we've learned:

- our laws, the ones that supposedly keep society stable and safe, don't apply to particular groups of people

- we can catch them, and maybe, just maybe, we will hold someone accountable for those people, though often they just distract and trick everyone from holding them accountable

- the majority of people are getting stolen from, treated like slaves and tricked and abused, and they will tolerate this abuse because of <fear???>

Am I to accept this frame of reality in which the universe and the earth, and the leaders currently making decisions for me and holding influence over the worlds' military powers, are this hostile towards me?

I refuse. I think we have more power than we think. In America at least, we still have an amendment that has yet to be repealed (created for scenarios in which abusers hold leadership positions and refuse to be accountable): the 1st amendment and parading guns legally, safely, and responsibly is a powerful reminder of what accountability and dignity looks like.

edit: I advocate for parading guns peacefully with an intention and purpose: go with a group standing for rights, safety and dignity

clarkmoody 1 day ago||
Insider trading laws are for the plebs. Tip off your cousin about an acquisition by a public company? Go to prison. Tip off your cronies about war? Business as usual.
leonidasrup 1 day ago||
"The U.S. Department of Justice said Wednesday that it had charged 30 people allegedly linked with a decade-long insider trading scheme involving high-profile law firms."

https://www.newsweek.com/premier-law-firms-spy-ring-11920914

guff_se 1 day ago||
Let me guess, these guys said something bad about Trump? Not that it means that they didn’t do it, just that they would not have gotten charged otherwise.
fny 1 day ago||
The list doesn't corroborate that. The international component seems important.
seany 1 day ago||
Honestly, insider trading laws should be removed since they manipulate markets. If you know things, make moves that are public, that would price things _more_ accurately.
tardedmeme 1 day ago||
It's easy to know something accurately when you are the one causing it.
charcircuit 2 days ago||
>paying what in retrospect will have been an excessive price

This can be said about any negative price movement. You still get the same amount of oil you agreed to regardless of if the price goes up or down afterwards.

smallmancontrov 1 day ago||
It's a tax. I don't know if you specifically are one of the "taxation is theft" types, but it's absolutely wild how many of these are totally cool with the tax if it's funding insider trading payouts but not if it's paying for poor person healthcare or whatever.
jstanley 1 day ago||
In the absence of the insider trader selling you oil futures on the basis of his insider knowledge, what would you do?

You'd buy oil futures at broadly the same price from someone else (maybe a worse price! Because the presence of the insider selling is already driving the price down). So how exactly do you lose?

The only people who lose out are those whose limit orders don't get filled because the insider outbid them. The counterparty benefits from trading with the insider.

smallmancontrov 1 day ago|||
This is completely ignorant of market microstructure. For big swaths of the market, most parties interacting with the market do so by trading with a market maker who ensures that everyone's trades clear immediately in exchange for a fee that covers the risk of getting caught offsides. If you're big enough, it makes sense to take that risk in house, but the risk and its very real financial cost remains. In both cases, trades that increase the risk increase the fee. So no, corruption is a tax and everyone pays the tax even though the mechanics have fallen through the rather large cracks in your understanding.

If you think this tax is de minimis, great, glad to hear it, let's put a government tax of similar magnitude in there and resume the peanut butter rations to starving african kids that DOGE cut.

jstanley 1 day ago||
Sometimes trading with people who have better information than you is part of the risk you take on when you run a market-making strategy.
this_was_posted 1 day ago||||
I'd say the entire market loses out on insider trading except for the two parties involved in the insider trade. The insider trades take away a part of the profit margin that other good faith future providers need to justify the risk they take on by offering the futures. This leads to future providers needing to raise the prices of futures to remain profitable.
quickthrowman 1 day ago|||
If market makers figure out that a handful of market participants are being fed inside information, they’ll widen the bid/ask, leading to increased transaction costs for everyone.

It also discourages speculators from entering trades if they suspect they’ll be run over by insiders trading on non-public information.

Fewer market participants leads to worse price discovery.

It’s probably bad.

skinfaxi 1 day ago||
Yes but it is being said about a manipulated movement, not any negative price movement.
charcircuit 1 day ago||
If a store sells a TV for $500 and they know they are going to run a sale the next day. The next day the customer may feel like they missed the sale, but the TV was still worth >$500 to him else he would not have bought it in the first place.
NordStreamYacht 1 day ago||
Is this an oligarchy or a kakistocracy?
smallmancontrov 1 day ago||
The Venn Diagram isn't a circle, but you need a magnifying glass to tell it from one.
danans 1 day ago||
> Is this an oligarchy or a kakistocracy?

Yes. Also a klepotocracy

fennecbutt 1 day ago|
The world will remember who you Americans chose to vote in.

And then we'll do nothing anyway because the wealthy and corrupt run every single country on the planet. Money talks.

And people are too easily preoccupied with trivial policy squabbles to care about how badly we've all been fucked by the last 50 years or so.

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