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Comment by karzeem | Hacker News Reader

This reminds me a little of the kid who "hacked" into Sarah Palin's email by guessing her easily guessable security questions. One on hand, if someone is sufficiently careless or stupid, it's unfair to punish you for helping yourself to the fruits of their carelessness. But on the other hand, you have to respect people's desire not to be exploited. If you leave laptop in a park for 10 minutes, it's wrong for someone to hop on and use it, even if you should have known better than to leave it unattended.

I have less sympathy for this exploited bot, though, since you go in knowing the stock market can be a ruthlessly zero-sum kind of place.

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I'd compare this to leaving your house's front door unlocked and open. You're an idiot, but if someone walks in and trashes the place, they still committed a crime.

That's my brain talking, of course. My gut reaction is to say, "stupid is as stupid does", and blame the person who wrote a buggy piece of software.

If you can guess how a person will react to market fluctuations and make money off of it, is that a crime?

It is if the counterparty bought themselves a government regulator.

Is it a crime to hustle at pool or poker?

If you cause the fluctuations, yes. It's called "market manipulation" and it has been illegal for a very long time.

> I'd compare this to leaving your house's front door unlocked and open. You're an idiot, but if someone walks in and trashes the place, they still committed a crime.

I disagree. The classic, respectable "value investor" takes advantage of other speculators mistakes by finding stocks who's value is irrationally low or high and betting against them. What's the moral difference?

If automated trading systems can't handle someone playing back at them without causing a "flash crash" then that's an argument against letting automated systems trade (at least under current regs) not an argument against the opponents who outsmarted one.

Yes but no.

Outwitting other people gambling on the stockmarket is explicitly legal, expected even. Thieving from unguarded targets is not.

The stock market is ruthless and zero sum, but there are rules in place.

If you make a "clearly erroneous trade" (e.g., 500 shares of GOOG at price $100 instead of 100 shares at $500) you can have the trade broken. You can say "oops, undo", as long as you do it within 30 minutes.

Market manipulation, specifically deliberately placing orders/trades/news to confuse other participants, is also illegal. It's illegal if you do it by pump up a stock on yahoo message boards, and it's illegal if you do it in a boiler room, and it's illegal if you do it to a bot.

Maybe the rules should be changed, but this is what they are at the moment (at least for US equities [1]). Everyone, besides a few bad actors (Trillium, these norweigans) is playing by these rules.

[1] I know Japan, for example, does not have the "clearly erroneous trade" rule.

I know Japan, for example, does not have the "clearly erroneous trade" rule.

However there are fat-finger protection barriers. TSE, for example, will limit prices based on previous day's close.

http://www.tse.or.jp/english/rules/regulations/rulesconcerni...

It's not zero sum game.

Depends what you mean by "Stock Market"

If it's a gateway to business ownership then it's not zero-sum.

If it's purely game to out-arbiter other participants then it is zero-sum.

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