Short term market manipulation

[Ross812]

I have a friend who is a trader and uses options/futures contracts around news events like today's FOMC announcement to trade. I as kind of struck by how all the large cap indexes get pulled around by market makers buying/selling to adjust for all the leverage being used. Look at all the big indexes with lots of options liquidity being pulled around versus the Russel 2000. It is kind of ridiculous. 

 

[Gregmal]

Yup. Purposely kept secret 95% of normal market participants don’t realize. Market is totally rigged short term. 
 

Go look up the SEC investigation into short selling. Most frequently manipulated stocks? AMZN, JPM, AAPL, WFC. Now imagine what it’s like for small caps?

 

Filth on WS is the main reason why most people have no business doing anything but buy and hold. 

[Ross812]

Yep. He messaged me to tell me to trade the lag between the S&P500 and the Russel. Three minutes later:

 

 

I guess that is one way to make a buck... He said he has made the same trade every FOMC meeting in the direction the other more responsive indices are heading. He loads up on daily IWM calls/puts slightly OTM and sells 5 minutes later. 

Edited November 2, 2022 by Ross812

[Ulti]

I also have a money professional buddy who  trades around the FOMC using options but mainly leveraged etfs . ( timeframe is slight longer than 5 minutes Ha ha) Has made great calls and is up close to 40% this year. He's been bang on following and calling short term trends leading up to the meetings. 

20 hours ago, Gregmal said:

Filth on WS is the main reason why most people have no business doing anything but buy and hold. 

Totally agree as well;  the one benefit is that the volatility created by these people allows long term holders to buy at an attractive price.