Time and again I'm convinced that it is extremely difficult to succeed as a retail trader. The odds of you succeeding given false signals like this are just depressingly low. And this is just one instance where the prosecution was able to prove wrongdoing.
The vast majority of retail traders who have better returns than an index fund are just lucky, not skilled. Sometimes you can flip a coin ten times and come up heads every time.
So if we had a game where 1 million people flipped a coin 10 times coins, we'd expect nearly 1,000 to get heads on every flip.
if there are 10 million robinhood "traders" doing their tenth big trade today, then 9,765 of them could make a fortune by luck and think they are geniuses.
The reason why retail traders rarely succeed is because the ones that are good move to the institutional level (as it is almost impossible to support yourself by trading alone). The bad ones invariably trade down their portfolio until they are forced to get a real job.
This isn't to say that you shouldn't retail trade, but rather, don't rely on it as your sole source of income (unless you have at least 2mm-5mm dollars to trade with).
I won't believe this without a citation to an academic study. This affects the underlying price of raw materials, which has a direct impact on the stock price of companies using those materials. The stock price of many of those companies has a direct impact on people's retirement and the solubility of pension funds, among other things.
White collar crime does has victims.
No it doesn't if you spoof orders it has only very short term effects.
If orders are spoofed during the start of day or end of day auctions or during other specific times when indexes are calculated then this impacts the settlement prices which has a knock on impact to other features of the market. It’s like the LIBOR rigging and the FX manipulation.
can you expound on this?
> jpmorgon might have to pay a 1B fine, but they might have made more than 5B in the transaction.
why don't they just make ill gotten gains illegal?
no.
"why don't they just make ill gotten gains illegal?"
follow the money
So $1B paid will stop further investigations? Meaning it can continue to manipulate and the fee is just the cost of doing business?
If the shareholders cared to avoid these sorts of judgements, they'd require that the firm operate more conservatively.
It's not tolerated, that's why they're being fined