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h00ts

35,875 Posts.

3285

16/01/15

13:11

Post #: 14594705
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Originally posted by shadowboxer1 ↑

Hoots

I just need you forget about CDU for now and concentrate on the bigger picture. I've just shown how queue jumping does occur with the non transparent exchange of Chi X. Now to use that to my advantage if I'm one of the biggest players on the ASX or any exchange.

Say I've just brought $20 000 shares worth $1.45 and this sale went through the ASX, great I'm now the holder of 13 793 shares in XYZ company and expect receipt of those share on CHESS in 3 days (T+3) now my unscrupulous broker has the ability to settle in 1 day but by law doesn't have to settle till 3 days. He immediately sells my shares on market for $1.45.

The next day the share price drops to $1.40 and he happens to have a client that wishes to sell at $1.40 the trade is then done on Chi X to allow him to jump the queue and buy those shares. He then settles my purchase with a receipt of shares the next day with CHESS for 13 793 shares with the ability to pocket the $689.80 and no one is any the wiser.

Just before close yesterday a few share in the company I watching sold for 10.2 cents on the ASX which is obviously a broker because us mere mortals don't have the ability to trade in the fraction of a cent above 10 cents and at the same time shares in that company sold for 10 cents on Chi X so why wasn't the buyer of those 10.2 cents share rerouted to the Chi X to purchase them at say 10.1 cents saying himself roughly 1% in cash.

Well once again that isn't for us mere mortals but a company with high frequency trading would of been able to queue jump and coupled with the ability to trade in the nano second making a profit of 2% between the exchanges. You may think my imagination is running wild but it takes a good imagination to implement a scam

Expand

Whoa Shadow there is a whole lot going on in that post - You are speaking about , HFT , naked shorting and 2 exchanges -

S/B Am I right in assuming you dont have a live depth screen ? - Many times I have bought and sold and I can see which exchange my order has been filled from - sometimes its just ASX sometimes its a mix fill ASX and CHI X and sometimes its just Chi X - I have listed an example below on BRU current depth screen a $340m market cap company similar to CDU.

CHI x trades obviously have a bigger presence on the blue chip stocks.

click to expand

top image is combined price points -second image is individual orders

Last edited by h00ts: 16/01/15

CDU Price at posting: $1.42 Sentiment: None Disclosure: Not Held
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0 Great analysis

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ASIC Short positions reporting, page-9

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