Market manipulation of ACWI programme High Frequency Trading (HFT) systems. I am also a long time (often suffering) irregular Stock investor.
When ACW made the announcement in early October about the status of Xanamem. I decided that it was worth putting some money into on the basis that if the drug proved to be effective over a longer period than that of the trial period then this could be a 10 or greater banger. The technical expertise behind the development is high class with the only downside risk then that the drug isn't effective over a longer term.
I got creamed on the price I paid.
I decided to have a look and see what was going on.
I'm posting this to layout what's happening with the trading in ACW, correct some of the misconceptions about the so called 'bot' trading and in the hope that the message will be passed on to the grubs that engage in price manipution and any of the Brokers that support them.
I want to also tell those grubs that manipulate the share price at the expense of the thousands of investors that bought the Stock believing, as I did, that these prices were fair only to see prices halve in some cases, in the plainest language that you will understand that the game is up.
If you are are a Direct Market Participent or a Broker that supports these grubs, I have the means to monitor every transaction and extract the Transaction and Broker Identifier and pass that on to ASIC.
And heres a little something extra for the Brokers that support this activity. In the past ASIC was able to extract 'Enforeceable Undertakings' from AFSL licence holders for transgressions. With the Banking Royal Commission that has now changed. I will do everying I can to make sure your licence is taken away, which will include if necessary a media campaign exposing you illegal activity.Now back to the regular decent folk...
For those that haven't observed how this Stock's price is manipulated, I'll give you a quick run down. (This discussion is not just about ACW, but any Stock that happens to have high volume (i.e. lots of trades) in a day).
A standard personal computer with a common processor running at around 3 Gigahertz is capable of executing about 400 million transactions (not computer instructions which is much higher) per second. This is clearly far in excess of what's required to process every order in ACM at any time.
Where most get tangled up in the 'bot' thing is how a Share Trade is processed.
Each Broker must have (as part of their agreement with the ASX (and CHI-X) and ASIC, a compliance policy. When a Trade is sent to a Broker, their systems are set with various filters to ensure the Trade complies with this policy. This filtering slows down the Trade be forwarded to the ASX's market trading system by a minute amount.
As an additional source of revenue, the ASX allows Professional and others of good standing (???) to participate in their market directly. These have what's called Direct Market Access (DMA).
Direct Market Access participants have their own Trading systems which have been approved by the ASX to use for DMA. These Trading systems are usually located close to the ASX Servers and are connected by optic cable. Most are hosted at the ASX Liquidity Centre building at Artamon. It is these systems which are the 'bots' that people are referring to and they can be programmed to do anything on the market and do it very quickly.
When you're a 'bot' you can 'see' faster what's going on in the market.
Once you've got your Stock at a low price (for the day), when you see that a stack of buyers is building at a certain price, you can keep pushing the buyers into a higher and higher prices by jumping on the end of a queue with an outrageous order (look for the 1,000,000, 1,500,000 and 2,000,000 order levels in ACW) unti the demand drops off and you can cancel the order before all those othe mug punters.
You can do this because you have direct access rather than the snail like speed of a telephone line connection. Of course the cancelling is done just after you've sold out at the higher price. All you have to do as a 'bot' for a sell order is the reverse of the procedure you used to buy.
So you grubby bot, you've manipulated the price using you unfair advantage of DMA at the expense of ligitimate genuine buyers or sellers. If you didn't know before, you now know that price manipulation is illegal. Just to push this point home, here's a link to the penalties for somebody that got caught:
https://asic.gov.au/about-asic/news-centre/find-a-media-release/2015-releases/15-271mr-nsw-man-jailed-for-market-manipulation/And for you grubby Brokers that facilitate and therefore condone this behaviour, perhaps the quick buck might not look so attactive from a cell window or from the outside of the building you worked from when you had an AFSL.
Again to the regular folks the read these posts, just don't whinge about this activity.
Fair enough if you've forked out for a super fast trading system that makes you money and your coffee while you read blogs on HotCopper. That's o.k. What's not o.k. is if your u-buet system is manipulating stock prices.
It's in all our interests if we call this price manipulation activity out and report it to ASIC. One or two of us on ASIC's case mightn't motivate them much, but I bet twenty or more of us would!
P.S. I've recieved notice from ASIC that they are investigating my complaint against this activity. I'll post their outcome.
(20min delay)
