EconMatters calls on the CFTC and the government to stop the manipulation of oil prices.
Courtesy of EconMatters
License to steal
Every single day the oil market is manipulated, it is easy to see, right out in the open, and nobody does anything about it. It literally is like having a license to rob banks right in front of everybody, including the armed security guards.
Large Fake Order Strategy
Here is a technique that is used by large players to manipulate price in either direction, and it needs to be banned, it is outright cheating. So a trading Dom is an order entry price ladder which shows a collection of bids on one side, a typical default setting would be ten levels deep. On the other side of the price ladder are ten levels of asks, going from nearest to farthest away from the current, or last traded price in oil.
For example, if oil is trading at $96.00, there will be asks (offers to sell) going from 96.01, 96.02…96.10 and conversely there will be bids (offers to buy) going from 95.99, 95.98…95.90. The cheating technique is as follows: Let`s say oil is trading at $96.00, and the bids and asks size on both sides of the ladder are relatively all the same size, let`s say 30 contracts.