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Wall Street is a funny place. It's a casino, in many ways. Speculation, market confidence, and political turmoil all play a role in its rises and falls. One person says that the recent craziness associated with the whole thing is the result of manipulation, and artificial motivations encouraged for political reasons.
The whistleblower says the whole thing is being manipulated by simple computer entries. The alleged manipulators are moving prices up and down, entering quotes for trades that are never executed, ultimately influencing values so that traders react in a certain way.
Wrongway short bets had become one of the most popular trades on Wall Street because volatility had gone eerily absent for a protracted period, encouraging investors, who were lamenting the narrow trading ranges present during that period of placidity, to make more aggressive wagers to generate richer returns. But, the whistleblower has been concerned about unfair markets where "VIX manipulation that has already caused investors to incur massive losses and is eager to prevent further harm from investors” is used to cause further damage. He charges that the average retail investor isn’t aware of how exchange-traded products like VIX are rebalanced daily and that a “mismatch” in the nature of short-volatility products means “a larger move in spot-volatility in either direction requires excessive buying or selling pressure whenever short volatility assets are dominant.”
Experts say the whistleblower is a fake who has no idea what he's talking about. His “letter is replete with inaccurate statements, misconceptions and factual errors, including a fundamental misunderstanding of the relationship between the VIX Index, VIX futures and volatility exchange traded products, among other things,” a Cboe spokeswoman said in a statement.
-- Political Pistachio Conservative News and Commentary
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