Comment by rich_sasha | Hacker News Reader

Comment by rich_sasha | Hacker News Reader

Parent Full thread

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.

The quantity makes it more than weird. This is not just price change or manipulation. Prices can move big amounts for weird reasons without significant changes in trade volumes. The volume of sales makes it significant.

$580 million sales of oil futures and probably similar amount of buys in stock futures means $1T quick billion move.

Nobody makes half trillion __trades__ for weird reasons and this was too short to be movement of sellers in general.

It is very weird and suspicious but not out of the realms of possibility. And I don't say it because I'm vouching here for the honesty of this administration. Crude oil contracts (WTI and Brent - both same size) traded roughly 3m contracts that day. 6,200 quoted by FT is about 2% of that. It's a lot - crazy much. But not crazy-crazy-someone-is-defo-a-crook crazy.

It's not even a given at this point that all these trades come from one person. In fact I doubt they do - because most brokerages would simply not allow you to put this trade. It could well be a huge trade, but a fraction of the 6200 that changed hands, then HFT algos jumping in in the action.

Which is all investigable, and should be investigated.

*580 million

There was equity futures and oil contracts both at the same time. Total risked with zero public news was approx $1.5B

Notional. Those contracts have between 8-15x leverage. Looking at the CNBC graph linked you can see the volume better (though not the actual lot sizes). The likely at risk dollars was probably closer to 10M across both.

Sure, I believe that. But not 580 Billion. (I sometimes wonder how much damage has been done to the United States political system by naming them million, billion and trillion. Would we all budget carefully and precisely consider the relative impacts of different scales of expenditure if a thousand thousand was a woozle, a thousand woozle added up to a brillig, and a thousand brillig was a fearsome vogon?)

I agree the article could include more data around the frequency and size of these kind of trades around other events and for a longer period.

However as the article notes the time and size of this particular series of trades makes it look suspicious and that’s all one can say with certainty at this point.

I'm happy with "very suspicious". But IMO you need more to title an article "Treason in the Futures Markets: People close to Trump are trading based on national secrets" based on "very suspicious".

> 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 (of the entire market move of at the announcement).

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.

Maybe a naive question: those transactions are traceable. But we assume this admin will not turn itself in. However, such transactions in other nations would be investigated. Are there cases of similar transactions before the US presidents tweets in i.e. Europe?

There's plenty of very suspicious trades in US politics, and presumably European ones too. Actually on both sides of the aisle. Senators putting trades in sectors that overlap with their committee memberships, or these trades appearing in their "blind trusts", with "no input" from the senators. There is so much of it that I am sure there is plenty of insider trading. On average, if you blindly follow their trades, will you make money? The evidence is mixed, and made worse by the fact that the disclosures can be made on paper (pen and paper is allowed!) and the records not all electronified. You can imagine the juiciest trades are probably "disclosed" on a napkin if at all.

There's no doubt it's very dirty business. I just find it lazy thinking to say, hey this one is very suspicious therefore definitely criminal.

I'm sorry but I'm finding it hard to believe this is a real comment.

How's this a coincidence?

Trump has boasted about this, that's the point we're in.[0]

They're announcing in a newsletter a fund raising where they will share national secrets with donors.[1]

This is literally people paying to get access to privileged information, in a fund raising for what?

Like it's openly being said that if you pay enough money, you will make a lot of money, this is unprecedented.

Trying to normalize it by saying "it's not corruption because it's done out in the open", or to bend reality to make an excuse for this, like it's a coincidence... it's insanity.

This could very well be the end, if the game is rigged at this level - and people trying to get as much out as possible while it lasts, while acting like no one understands what's going on, it's one of the scariest things I've witnessed. It's like we're falling off a cliff and people are shoving money in their pockets while saying "we're not falling, it's just the wind".

[0]https://youtube.com/shorts/E2dr8En2N5A

[1]https://youtube.com/shorts/yhG1XWptoak

It’s a serious comment, posted solely with the intent to sow doubt.

Reply on news.ycombinator.com