[quackerhacker]

"Their algorithms are designed to pick up on stock prices fluctuating before major corporate announcements, indicating that those buying or selling have insider knowledge..."

As someone who has coded high frequency algos that tracked orders and fill rate velocity, I love this little tidbit of knowledge that FINRA utilizes it's own types of analysis. It intrigues me to imagine the accuracy and dismissal of false positives. sorry nerding out on the tech

[anonymous5133]

What I always thought to be interesting is by analyzing those pre-announcement movements. We all know there are always people trading on insider information so it would be possible to use those pre-announcement movements to your advantage. If you see the stock price dropping before the announcement, then best to unload your shares or vice versa.

[AznHisoka]

This doesn’t work because there is no insider trading in most cases, and even if there were, you might be fooled by mass idiots trading the opposite directon of the insider.

[bsder]

> It intrigues me to imagine the accuracy and dismissal of false positives. sorry nerding out on the tech

Probably not tech for false positives.

You probably don't have to winnow too far before humans can handle the remainder.

[quackerhacker]

There absolutely has to be tech analysis of a trader's entire portfolio or majority of their trades in order to really investigate before it passes off to human review.

The real beauty in this statement is the merging of fundamental analysis (news releases, ect.) with tech analysis. I don't mean tech analysis in the context of pivot points, sma's, rsi's, ect...I mean tech analysis on the evaluation of the winners of a significant price movement and their entire trades and current portfolio. THAT is the mind boggling algo.

Just b/c a trader makes x amount on a move doesn't mean they had privileged info. A tech eval has to eval their entry and exits to see if they were prime/ideal moves and most importantly their order size and order type, but it ultimately comes down to pattern evaluating their order history across multiple assets and see if their transaction history is generally successful and positions are taking prior to news release...then flag for human review and substantiate evidence.

[gammateam]

the bigger irony is that the SEC and FINRA were doing exactly what one of the hackers said they were doing, but got them - Ukranian and Russian trading firms - to settle over $10m just because they happened to know the other traders and would try to prove it in court that way if they didn't settle.

okay, knows prominent traders and hackers who trade US equities from Russian timezones, small world?

I don't like that story

[quackerhacker]

I don't see that implication in the article. I think you're referring to this part "your guys were detected. They were trading with very big money and there was a lot of fuss about them, about how it’s not the season and when it was the season they traded."

This excerpt most likely implies that the inside trades were for commodities (future contracts) and was sent to one of the relative people involved in the hack.

What would be irony (but of course is speculation) is if any of the brokerages that the hackers submitted trades thru did front-running (matching their trades at entry).