Posts Tagged ‘GS’
The Most Unpredictable Market Event
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| Written by Jared Levy, Editor, Option Strategies Weekly | |||||
| Friday, 16 September 2011 09:05 | |||||
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This theory, developed by Nassim Nicolas Taleb, describes a Black Swan event as one of three things:
In essence, a Black Swan event is something that has such a small chance of happening that it’s not accounted for in the models that the quants (quantitative analysts) use to predict risk. These quants use statistics to figure out just how probable a trade is going to be. Being a bit of a math junky myself, I use these same calculations. But being a trader, which many quants are not, I know there is a human element that NO model can predict. What most of us don’t realize is that Black Swans happen much more often than we think. In fact, we could be on the precipice of another… Usually the worst Black Swan events in the market occur when people are off guard or beginning to feel like a major problem has been solved. When markets are emerging from what appears to be a bottom and major catastrophe seems to be averted, our defenses are down. Black Swan events occur just when everyone is feeling comfortable, not vulnerable. This was exactly what happened at the end of 2008, right around the time the world’s investment guru Warren Buffett injected Read more |
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The Black Swan Theory describes unpredictable events of extraordinary magnitude. The meltdown of 2008/2009 would be a perfect example of a major Guess Who Is Manipulating the Markets
Friday, 12 August 2011
When we think of market manipulators, names like Bernie Madoff and Mike Milken come to mind. Or perhaps it’s Michael Douglas’ character Gordon Gekko from the 1987 classic Wall Street.
These guys profited from exploiting investors, causing major losses in the process.
All three of these men went to jail for their crimes, even the fictional Gordon Gekko. But there is blatant market manipulation taking place right now that is sure to go unpunished. The worst part is that it is happening in plain sight.
What Is Market Manipulation?
Market manipulation can come in many forms.
Inside information, one of the more common forms, can be used to get an edge over investors and take advantage of their elation or panic once the information becomes public.
Insiders can be corporate executives, their close friends and family, or anyone who obtains non-public information before it’s available to the public.
An example would be an employee of the National Agricultural Statistics Service (NASS) who gains knowledge of a crop report for oranges that shows far fewer were harvested this past season. If there were fewer oranges produced, prices would be sure to rise. If that person buys thousands of OJ futures ahead of the report, he is almost sure to profit. This is a form of insider trading, punishable by law.
Another form of market manipulation is the exploitation of technology.
Take the Small Order Execution System, aka the SOES. Whenever investors use the SOES to exploit traders or manipulate prices, they may or may not be breaking the law. It is a fine line that has been walked for many years. The “SOES Bandits” gained popularity back in the late ’80s and ’90s when firms like Datek Securities allowed active traders to take advantage of a weakness in the SOES.
Some call High Frequency Trading (HFT) traders the SOES Bandits of the new millennium. While we can’t blame extreme volatility on all HFT traders, I know there are some who are taking advantage of the system and causing investors to get undesirable results in their trades.
No… the real manipulators are different animals entirely.
The Real Market Manipulators
Believe it or not, the HFT traders don’t Read more
You Won’t Believe What Goldman Sachs Is Hiding
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| Written by Jared Levy, Editor, WaveStrength Options Weekly | |||||
| Friday, 29 July 2011 10:19 | |||||
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Like clockwork, the Nasdaq dropped 90 points or 3%. When heavyweights like Goldman Sachs (GS:NYSE) and Morgan Stanley (MS:NYSE) start to invest in something, you can make some “smart money” riding their coattails. These financial superpowers use their connections and power to get an edge on the average investor. But with a little research and some smart investing tactics, we can uncover their buy and sell list… and get in on their secrets. Wait until you hear what they are stockpiling… Goldman Sachs’ New Market VentureOnce in a while, a big firm ventures away from Wall Street to get its hands dirty. When a profit is at stake, nothing is out of reach. Morgan Stanley took a left turn off Wall Street in 2008 when it took over Chicago’s parking meters for the next 75 years. That deal paid the city $1.15 billion up front and has made Morgan Stanley some serious coin. (Many say that Chicago should have asked for closer to $4 billion.) Little does most of Chicago know that those parking meters are now controlled by investment groups in the Middle East. Don’t expect Chicago to change their free parking hours easily. Goldman Sachs’s newest venture is also off the beaten path. Goldman Sachs is getting in the metals market… in a way no one expected. (Don’t forget to sign up for Smart Investing Daily and let me and fellow editor Sara Nunnally simplify the market for you with our easy-to-understand articles.) Gaining Advantage in the Metals MarketWhen you think about Goldman Sachs, you might think of its exclusive money management services or its elite investment professionals. You would not expect to hear the news this “white shoe” firm just bought Read more |
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Earlier this week, I showed you how Wall Street’s fat cats hide their big trades in the option markets. In that article I described some strange yet serious bearish option activity I discovered in the Nasdaq-100 (NDX).CNBC Blast from the Past – May 6, 2009
With my Pal Jeff Tomasulo