Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

$70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

data-and-politics.ghost.io

Post reply on HN
Print view View original

41–50 of 480 posts

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#41

Post by dwedge »

huijzer wrote: post #28

Overall the argument by the author is very convincing and well put. One part I don’t fully agree with is > If the trades hadn’t worked out, the losses would have been swift and total. Zero-day options don’t forgive bad timing. The entire $2.5 million could have evaporated by the close of trading. Even with SPY shares, any unexpected reversal would have meant millions in losses. This has exactly been Taleb’s strategy.…

Unless I'm totally misreading this, it wasn't a 2.5m trade, it was 80c per option at 30,000 of them, less than $30k

The option to buy at 2.5m was not an obligation to do so

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#42

Post by amszmidt »

irrational wrote: post #31
solardev wrote: post #12

Earlier quoted context omitted.

[flagged]

Except the military.

Alas, the military answers to the president.

Article II Section 2 of the U.S. Constitution, "the President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States."

Not that the constitution matters ...

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#43

Post by eru »

solardev wrote: post #14
nramanand wrote: post #13

A relevant aside: surely insider trading is happening all the time? There are so many daily market-shifting events involving so many privy parties that it seems inevitable to happen every few minutes (not defending the actions in the article). How many physicians have been able to get rich from learning a CEO will be out of commission? In that case, I'm not even sure whether it would be considered insider trading. Ho…

In the past, we liked to pretend this was illegal. Now we don't even bother with that.

Insider trading in the US is more about misappropriating information that belong to a party you have fiduciary duties to, not so much about harm to the public.

For example, imagine you are working for Warren Buffet and you learn that he has quietly bought some stocks and next weeks he's going to announce that. Assume that this announcement will reliably make the stock trade up. If you trade on that information, that's insider trading by US laws.

However, now imagine that you are Warren Buffet. You just quietly bought some stock, and you plan to announce that fact next week. If you trade on that information about your intentions, that's not insider trading by US law: you are allowed to trade on your own private intentions and information.

Notice that from the point of view of the anonymous counter party trading with you on the stock exchange, both situations look exactly the same.

That's an illustration that insider trading law in the US is not supposed to protect the public. (At least not originally.) So making insider trading legal in the US wouldn't make the general public any worse off.

Of course, IANAL applies. The above explanation is mostly paraphrased from Matt Levine's Money Stuff.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#44

Post by eru »

svg7 wrote: post #19

While I have no doubt that insider trading happens quite regularly, I would not jump to that conclusion here. IIRC the previous day, big Wall street names were advocating for a pause in tariffs . So a lot of people placed bets accordingly. Also staking 2.5M is "small change" for true insiders.

> Also staking 2.5M is "small change" for true insiders.

Why? A secretary or janitor or a intern could also be an insider. Or are they No True Scotsmen?

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#45

Post by anovikov »

I think we should get over the fact that any pretense of obeying the law and morality have now evaporated and everyone trying to stay in those bounds will inevitably lose because not doing so gives such an enormous advantage. People will not just do inside trades, but will actually cause geopolitical scale events simply to do a good trade.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#46

Post by eru »

pineaux wrote: post #40
eru wrote: post #32

Earlier quoted context omitted.

It depends on what you mean by 'strong regulations'. Regulations that are on the books should be enforced as written. In that sense I agree. But it doesn't mean that we actually necessarily need all the regulations that are on the books to stay on the books. Eg, it would be perfectly fine to make insider trading legal by law. (And in fact, the definition of insider trading in the US differs a lot from the one used in…

You could make insider trading legal by law, but that would destroy a lot of the stock market because all non-insiders would basically set themselves up to be ripped off.

No, it wouldn't destroy the stock market. See https://news.ycombinator.com/item?id=43661926 for an explanation.

Summary: people are already allowed to trade on inside information (in the US), if the person who officially owns the information is ok with that. The prohibition on insider trading in the US is about fiduciary duty to the owner of the information, not about protecting the general public.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#47

Post by ncann »

huijzer wrote: post #28

Overall the argument by the author is very convincing and well put. One part I don’t fully agree with is > If the trades hadn’t worked out, the losses would have been swift and total. Zero-day options don’t forgive bad timing. The entire $2.5 million could have evaporated by the close of trading. Even with SPY shares, any unexpected reversal would have meant millions in losses. This has exactly been Taleb’s strategy.…

> So I would like some data about whether similar options were bought on other days in similar volumes.

The volumes are there for all to see and the answer is no.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#48

Post by bruce511 »

solardev wrote: post #12
sebasv_ wrote: post #8

Earlier quoted context omitted.

What would determine whether the SEC will investigate for insider trading? I would expect them to be shielded from executive pressure.

[flagged]

I agree, at this point. There is of course voter agency in 2 years.

Of course lots of voters (specifically the ones that voted for this) are pretty happy with the way things are going. So any kind of blowback is uncertain at best.

If the population were genuinely interested in removing Trump, they could elect 60 democrats to the senate and a house majority, then impeach. But again, a healthy chunk are happy, and a lot if the rest can't vote Democrat for social / tribal reasons.

But make no mistake, he operates above the law because the people think it's OK. They alone have the power to remove him.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#49

Post by miohtama »

nramanand wrote: post #13

A relevant aside: surely insider trading is happening all the time? There are so many daily market-shifting events involving so many privy parties that it seems inevitable to happen every few minutes (not defending the actions in the article). How many physicians have been able to get rich from learning a CEO will be out of commission? In that case, I'm not even sure whether it would be considered insider trading. Ho…

It has been estimated 25% of stock market trading is some sort of insider trading. However 1) it depends where you draw the line what's insider information and what not 2) not all of these trades all profitable.

Due to insider trading rules being problematic, sometimes more headache than benefit, the UK FCA is now allowing new stock market to launch where insider trading is legal.

Re: $70M in 60 Seconds: How Insider Info Helped Someone 28x Their Money

#50

Post by readthenotes1 »

richardw wrote: post #20
hdevalence wrote: post #3

> We don’t know who placed the trades. We don’t know what they knew. Actually, “we”, collectively, do know, because the SEC maintains an “XKEYSCORE for equities” called CAT. If there was interest, the government could know exactly who placed these trades. But the call (options) are coming from inside the house.

You keep the receipts for about 4 years and you speak up one minute after the government changes. You get it done long before the following election.

Assuming the President doesn't pardon you for all crimes committed from 2008 until 2030...
Post reply on HN