Vanity Fair reported four mysterious trades that happened in June and September. These trades were out of the ordinary because the trader or group of traders responsible bought tens of thousands of S&P e-mini contracts minutes before the markets closed. What makes these trades more suspicious is the fact that market-changing events such as the attack on a Saudi oil-producer took place after the trades were placed. Was insider trading involved?
One catalyst that sent markets tumbling to the benefit of a trader who shorted S&P e-mini contracts before the attack. | Source: Twitter
One of the trades was placed on Sept. 10. Someone purchased 82,000 e-mini contracts ten minutes before the Chicago Mercantile Exchange closed. The following morning, China announced that it would lift tariffs on a number of U.S. merchandise. Trump responded by postponing tariffs on select Chinese products. The confluence of events rewarded the person with $190 million in profits.
There are three other trades that followed the same formula; buy at the close and wait for a fortuitous event to happen. One of those trades allowed a trader to make a killing to the tune of $1.8 billion in about a week.
Is it pure luck that powered these insane profits or is there a heinous collusion involved? We interviewed a former banking regulator and a slew of traders. Most of them believe that no one is that fortunate.
Former Regulator: ‘The Financial Markets Are Notorious for Being Driven by Emotion Rather Than Logical Decisions’
Those who trade before the market closes are often consumed by the fear of missing out. Sukhi Jutla, who worked in the financial industry implementing regulations to prevent market manipulations, agrees.