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b1ur | 5 years ago

Even so, I think that there's enough random idiots making random trades on the market that you could get away with it. You could anonymously post something that sounds vaguely credible on reddit's WSB board and use that as your justification if the SEC asks. If you do a good job, you've just convinced 100 people to be your patsies (and made them a handsome sum in the meantime)

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notyourday|5 years ago

That is predicated on dumb money not trading in patterns that are visible to market surveillance. We know for it not to be the case.

First of all, market surveillance is going to score trades based on profitability and on the expected value of outcomes. If the actor in question does not have a habit of trading options in certain patterns, he will be sticking out of the sea of other bets, significantly reducing the number of actors he can hide in. This will flag money movement. This will flag strange account funding. This will flag strange volume. This will flag strange time the order was placed in compared to the usual trades of this individual.

> If you do a good job, you've just convinced 100 people to be your patsies (and made them a handsome sum in the meantime)

This will probably not increase but decrease randomness.

The trick of avoiding being picked up on a market surveillance is not to hide among others who do what one does rather it is to hide a specific action one performs among a pattern of one's typical actions. That is why a hacker who does not normally trade options will most likely get nailed should he win based on a hack.