Market manipulation article

[Iron]

I've come across an interesting article about market manipulation in the financial markets: http://www.trading-naked.com/library/Jo ... 31-240.pdf

The author basically argues that what he calls 'strong hands' force prices one way to compel other traders to close their positions and thereby release liquidity, and then send the price in the opposite direction. For example, they might force the price down, causing weak traders to sell. They would then buy the weak traders' stock, and then force the price upwards.

Do you all think this sort of practice happens on Betfair?

Jeff

[CaerMyrddin]

As far as I can tell, there are different levels of information that you can buy on finantial markets, including knowing where stop losses are. That means that you can be in a position where it's profitable to sell and rebuy at a lower price, by triggering the stop losses.

In Betfair that's not an option, but other kind of manipulation can occur. There is a very long topic on the subject.

[Iron]

Hi CaerMyrddin

No-one knows for sure where the stops are in a financial market. You can only make an educated guess - for example, many people place stops around points of support and resistance, or at big round numbers.

Incidentally, traders on Betfair have an advantage over financial traders, in that they can see how much unmatched money there is at each price. This presumably makes it easier to spot points of support and resistance

Jeff

As far as I can tell, there are different levels of information that you can buy on finantial markets, including knowing where stop losses are. That means that you can be in a position where it's profitable to sell and rebuy at a lower price, by triggering the stop losses.

In Betfair that's not an option, but other kind of manipulation can occur. There is a very long topic on the subject.

[Exacta]

More market manipulation

Can the world of online poker chase out the cheats?

http://www.bbc.co.uk/news/uk-11250835