Treason in the Futures Markets
https://paulkrugman.substack.com/p/treason-in-the-futures-markets
Treason in the Futures Markets
https://paulkrugman.substack.com/p/treason-in-the-futures-markets
While I agree it is very suspicious, needs investigating and far, far greater oversight in general, I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird. People trade for weird reasons, sometimes gently and in small size, sometimes aggressively and all at once. We're zooming in at a short window just before the tweet. If you look at random windows you'll find these too. 6.49 am is around lunchtime in Europe, and people exist there too. Crude oil liquidity isnt at its peak at that time but certainly not "thin". It's really not that uncommon for traders to accidentally send a "fat finger" trade, much bigger in size than intended or appropriate for the market conditions.
I'm not trying to split hairs here. There's been plenty of weird coincidences and each should be investigated, and on the balance of probability at least one may well be insider trading at the highest echelons. And in any case, in any financial job you need pre clearance for trades, often justifying why you're doing them if they are odd enough. There are minimum holding periods, day trading is not allowed, and the full record auditable by regulators. It is insane to me that politicians are not subject to such rules and it must change.
But to conclude that a weird trading pattern is definitely insider trading is IMO cheap. It's like TV drama where the unemployed, wife-beater-wearing husband definitely killed the wife, end of story.
The real tragedy IMO is that this is really avoidable. It would take very basic, very standard regulation to stamp this out, and we wouldn't be debating this in a technology forum.
> I'm not sure there is enough to conclude this definitely is insider trading. Markets are weird.
This was 6-8x the size all the existing trades on market combined, with zero other publicly available information early on a Monday morning 15 mins before an announcement that significantly moved the market.
Not even the biggest hedge funds in the world with coked up yolo traders go make 1.5 billion dollar bets like that, it simply doesn't happen.
It's egregious and blatant insider trading. The position got closed not long after the news came out.
To be clear when people quote the billion dollar number they are quoting the notional value.
Those contracts have between 8-15x leverage depending on margin rules.
This doesn’t remove the corruption problem but it brings the number down into realistic values. And while the volumes were odd for the overnight they aren’t that strange for normal hours trading.