Guys Check this expose by a whistle blower from a Hedge Fund in Singapore on how the Operations on NSE were gamed by unscrupulous players and 20% profits shared with the Tech Provider through Variable Manhours Billings for Managed Services….all faciltiated in collusion with NSE Data Centre Staff and the shocking hush up by NSE Management
Get acquainted with terms like Latency,TBT and Multilegged IOC to grasp how it was a unlevel playing field
Many NSE Members manipulated the System to take advantage of being first connected to a low load server or gain unfair latency by first being connected to a backup server when load balancers were in place
They received price information micro seconds before others who did not manipulate the system did and which helped them develop software codes to implement Two legged of Multi legged Immediate or Cancel Orders to lock in Riskless Profits for themselves and their High Net Worth Clients through High Frequency Trading
Have always held that High Frequency Trading made a mockery of Research & Fairplay and a Level Playing Field through Tweaking Technology
The Whistle Blower states that Riskless Profits were being generated by Gaming the System !
Love some of the Phrases used in the Expose like :
” About Non Collocation persons well they were the people who were never even reached the stadium where the race would take place”
Well! the Risk was in getting caught and now that you, my friend ,Whistle Blower have blown the Whistle !
I hope SEBI gets ALL those who indulged in this at NSE….those who indulged can be accused of Insider Trading too!
That’s providing your detailed expose of the ‘modus operandi’ checks out
Why do I get the feeling that it will and because it will , it will not be !
Spare a thought for those unsuspecting speculators who did not game the system….their losses were the riskless gains of those who did !
They would be well within their rights and justified to take legal action….this would hopefully force SEBI to act on the whistleblower’s letter to it as linked above
On a Lighter Note at least on this front of HFT ,the BSE must breathe a sigh of relief that it was not involved in such malpractice as Derivatives never had really taken off on the Exchange till recently !….Ah! perhaps BSE may conclude that it was this NSE Unfair Advantage why Derivatives had never really taken off on BSE !
1 thought on “Riskless Profits through High Frequency Trading on NSE or Plain Cheating!?”
Wow…This whitleblower must be very knowledgable about the systems to understand this.