Are Trump insiders making huge fortunes with stock market futures?

[septimus]

From this article:

In the last 10 minutes of trading at the Chicago Mercantile Exchange on Friday, September 13, someone got very lucky. That’s when he or she, or a group of people, sold short 120,000 “S&P e-minis”—electronically traded futures contracts linked to the Standard & Poor’s 500 stock index—when the index was trading around 3010. The time was 3:50 p.m. in New York; it was nearing midnight in Tehran. A few hours later, drones attacked a large swath of Saudi Arabia’s oil infrastructure, choking off production in the country and sending oil prices soaring. By the time the CME next opened, for pretrading on Sunday night, the S&P index had fallen 30 points, giving that very fortunate trader, or traders, a quick $180 million profit.

It was not an isolated occurrence. Three days earlier, in the last 10 minutes of trading, someone bought 82,000 S&P e-minis when the index was trading at 2969. That was nearly 4 a.m. on September 11 in Beijing, where a few hours later, the Chinese government announced that it would lift tariffs on a range of American-made products… If you were the lucky one who bought the 82,000 e-mini contracts, well, then you were sitting on a one-day profit of roughly $190 million.

But these wins were peanuts compared to the money made by a trader, or group of traders, who bought 420,000 September e-minis in the last 30 minutes of trading on June 28. That was some 40% of the day’s trading volume in September e-minis—making it a trade that could not easily be ignored. By then, President Trump was … on his way to a roughly hour-long meeting with China’s President Xi Jinping[; he] emerged from his meeting with Xi and announced that the intermittent trade talks were “back on track.” … Whoever bought the 420,000 e-minis on June 28 had made a handsome profit of nearly $1.8 billion.

Traders in the Chicago pits have been watching these kinds of wagers with an increasing mixture of shock and awe since the start of the Trump presidency… do [the traders] have inside information?

Theoretically, market regulators are supposed to be keeping an eye on big trades … But calls to [three regulaters produced little or no comment.]

There is no way for another trader, let alone an outsider such as me, to know who is making these trades. But regulators know or can find out. One longtime CME trader who has been watching with disgust says he’s never seen anything quite like these trades, not at least since al-Qaida cashed in before initiating the September 11 attacks. “There is definite hanky-panky going on, to the world’s financial markets’ detriment,” he says. “This is abysmal.”

In the case of Trump, market manipulation also yields political dividends… [One] single Trump lie briefly inflated domestic markets by hundreds of billions of dollars. “What this describes is, quite literally, market manipulation that constitutes criminal violations of the Securities Exchange Act of 1934,” commented George Conway, the conservative attorney and Trump critic…

[jasg]

Here is a counter article in Slate - Don’t Believe Vanity Fair’s Story About Futures Traders Making Billions Off of Trump Chaos.

@Slate

The story is bullshit. (It was bullshit the first time around, too, but people seem to be paying more attention this time.)

Let’s start with the headline: “ ‘There Is Definite Hanky-Panky Going On’: The Fantastically Profitable Mystery of the Trump Chaos Trades.”

The quote in the headline comes from an anonymous “longtime CME trader” who also believes in the long-debunked conspiracy theory that al-Qaida “cashed in” by front-running the Sept. 11 attacks—that is, trading on the knowledge of an upcoming event—on international futures markets. The headline asserts the existence of “Trump chaos trades,” meaning traders making money by front-running market chaos in the wake of Trump statements, but the story adduces no evidence that any such Trump chaos trades actually exist. As for “fantastically profitable,” there’s similarly no evidence at all that anybody made any money here, let alone billions of dollars.

[dalej42]

Former futures trade desk employee here. Large trades at the end of session on a Friday? That’s a typical Friday move. Perhaps a hedge, perhaps a ETN making a trade, lots of different reasons.

Two reasons why the conspiracy theory is nonsense.

1. If Deep Throat knew something, then they’d be trading the crude contract CL which is a huge contract. For every .01 move in CL, that’s a gain or loss of $10 per contract. They wouldn’t be farting around with the e-mini S&P. Much easier to trade fewer front month CL contracts which have excellent liquidity even on Sunday when the markets reopen.

2. Even if Deep Throat knew on Friday what Trump said he we going to do, do you seriously think that anyone can predict what Trump will do hour to hour?

[TriPolar]

Are Trump insiders making huge fortunes with stock market futures?

Yes. I don’t know if they had inside info to do that though.

[septimus]

Insider trading may or may not be going on — The public data is just too scant to be sure. Pedestrians can download time, price and volume, but identities of traders are …? Available to Wall St. insiders?? Available to federal regulaters!(?) Would it be appropriate for the federal regulators to examine lists of transactions and beneficiary, and look for patterns, whether manually or with automated software? Does Congress have subpoena power?

Based on the ethics of Trump, other corrupt leaders, and their cronies, I would be highly surprised if illicit insider trading were NOT going on.

Who’s buying (or shorting) the derivatives?
Do the trades correlate (more than chance level) with future news events?
Do it once or twice and shame on you.
Do it thrice and shame on us [the public, and our delegates, the reg agencies] for not catching you.

@dalej42

Former futures trade desk employee here. Large trades at the end of session on a Friday? That’s a typical Friday move. Perhaps a hedge, perhaps a ETN making a trade, lots of different reasons.

The trader who says “There is definite hanky-panky going on … This is abysmal” is a crackpot? Probably. And the anti-Trump reporter who wrote the story is prone to exaggerate? Sure. But again, it would be highly surprising if there were no hanky-panky!

Is it true that government regulators have easy access to benefiting buyers? Can curious auditors unilaterally target a group of traders for tracking? (Are trading data subject to Congressional subpoena?)

Two reasons why the conspiracy theory is nonsense.

1. If Deep Throat knew something, then they’d be trading the crude contract CL which is a huge contract.

Perhaps. But mightn’t traders prefer the very high-volume future for several simplicities: market alpha&beta, liquidity, and especially to hide their trail.

2. Even if Deep Throat knew on Friday what Trump said he we going to do, do you seriously think that anyone can predict what Trump will do hour to hour?

In the Trump is just a Nitwit/Brat Hypothesis, you’re right. BUT instead Trump and his ilk do know how to turn a quick buck and do remain victim to personal greed. Might not some trusted crony, perhaps on the golf course, or chatting with an intermediary like Rudy G., say “Tip me off, friend. We all will be very grateful.” ? Given a surmisable view of Trump’s ethics I’d go beyond “possible” and call it “likely.” Get on Donnie’s bad side and he might flip the tip — I’d want to look at the data for losers also.

I wouldn’t be surprised if multiple insiders — I dunno. Who knows? — J. Kushner, Rudy G., Manafort with his smuggled cellphone, and Vladimir Vladimirovich P., maybe. Erdogan, Xi, Kim, Melania T., not to mention a bagman out somewhere selling inside information for suitcases. (Note that Trump- or America-aligned interests need not even be the beneficiary.)

Am I pushing conspiracy theories with no evidence? Sure. But with this gang of crooks in charge, all of us know that these conspiracy theories have a factual core; that core could probably be retrieved with careful study of data available to regulators.

[dalej42]

Take the tin foil hat off, please. I HATE Donald Trump but the idea that someone is ‘insider trading’ on a stock market index is ridiculous. To answer some of your questions:

1. There are large position reporting requirements but those only apply to how you end the day. I’ve never worked in compliance and I can’t be arsed to look them up. But, they don’t apply to what happens intraday.

2. These are electronic trades so no one knows the trader’s identities and there’s nothing wrong with that. Modern trainer isn’t a an eBay auction. If I place a buy order for 100 e-mini S&P contracts on Globex, then I could be filled by 100 different individuals, possibly at different prices.

3. Ok, let’s assume you’re right. Every crook inside the Trump administration is determined to use their access to privileged information to make a fortune. The problem with that theory is that no one can predict what might happen outside Trump’s control. Let’s say that Boris Johnson shocked the world and resigned after losing the Brexit vote yesterday or Benjamin Netanyahu is assassinated or a plane crashes into the Sears Tower this afternoon. There’s a reason serious traders like to take risk off over the weekend.

[enipla]

I wouldn’t think that Trump is giving tips. He hasn’t a clue. I did wonder once if perhaps someone/s could easily sway Trump to put a tariff on a particular item, affecting the market (look at soy beans). The man looks to be very easy to manipulate.

BUT, he is also completely unreliable. A lose cannon that can’t be trusted (unless of course he has skin in the game).

[Corry_El]

@dalej42

2. Even if Deep Throat knew on Friday what Trump said he we going to do, do you seriously think that anyone can predict what Trump will do hour to hour?

I think that’s the big point which is different than previous administrations. Nobody knows what Trump is going to tweet, except Trump. He’s far less predictable to admin insiders than previous presidents in the 24hr electronic market era.

Otherwise, and let’s give an example which skips debating whether it’s a FACT that the GOP is evil and Dems are good, GW Bush insiders could have done this just as easily or more, since something their boss appeared to agree with in a private meeting would probably track with what eventually got announced as admin policy publicly. With Trump there’s much less certainly for people privy to the inside discussions what Trump will end out putting out directly himself.

And ‘people have seen big trades in the futures’ proves zilch about where they are coming from I agree.

[dalej42]

@enipla

I wouldn’t think that Trump is giving tips. He hasn’t a clue. I did wonder once if perhaps someone/s could easily sway Trump to put a tariff on a particular item, affecting the market (look at soy beans). The man looks to be very easy to manipulate.

BUT, he is also completely unreliable. A lose cannon that can’t be trusted (unless of course he has skin in the game).

This is true, but no president can control the weather and a crop report will always have more influence on the beans market. Take a look at this year with all the rain in the Midwest causing planting delays. Or look back to 2012 and the drought.

[ftg]

Early on I noticed how Trump would tweet something critical about, for example, a defense contractor, and that company’s stock would go down.

Clearly this is an opportunity to make some money. Trump let’s someone know what he’s going to tweet. Friend shorts stock. Trump tweets. Friend closes position and $ ensues.

But the question is Trump & Co organized enough to do this in a “safe” way not just once but over and over and over? I don’t think so.

OTOH, there are surprisingly many people involved in Trump’s social media. One of them might have a friend/relative in the market and a call is made once in a while to give a head’s up. OTOOH, these social media folk can’t seem to fix spelling and other errors in Trump’s tweets before they go live. (Note: there have been cases where a tweet is made while Trump is on camera at an event not tweeting. So it’s not all straight from his thumbs to our screens.)

[Tempe_Jeff]

The only Presidential Candidate with a history of playing the market…is Hillary Clinton.

Hillary Clinton Turned $1,000 Into $99,540, White House Says (Published 1994)

[mjmlabs]

[slight hijack]

@ftg

… these social media folk can’t seem to fix spelling and other errors in Trump’s tweets before they go live. (Note: there have been cases where a tweet is made while Trump is on camera at an event not tweeting. So it’s not all straight from his thumbs to our screens.)

Those social media folk have been known to intentionally insert miss spellins and Randomly Capitalized words. It’s believed that it makes Trump “more relatable” to his MAGA-head base. [/slight hijack]

[mjmlabs]

@Tempe_Jeff

The only Presidential Candidate with a history of playing the market…is Hillary Clinton.

Oh, is she running again? I hadn’t heard that. Land sakes, things do move quickly these days.

[Tempe_Jeff]

@mjmlabs

Oh, is she running again? I hadn’t heard that. Land sakes, things do move quickly these days.

https://www.cnn.com/2019/10/09/politics/hillary-clinton-2020-donald-trump/index.html

I dunno, you tell me.

[mjmlabs]

@Tempe_Jeff

https://www.cnn.com/2019/10/09/politics/hillary-clinton-2020-donald-trump/index.html

I dunno, you tell me.

Okay … <reads cited article> … um, no. No, she’s not. Says so right there.

But thanks for calling her investment history from … <double-checks> … 40 years ago, and longer, to our attention.

[RioRico]

@mjmlabs

Okay … <reads cited article> … um, no. No, she’s not. Says so right there.

But thanks for calling her investment history from … <double-checks> … 40 years ago, and longer, to our attention.

For comparison, let’s look at the investment history of Tramp… oh right, we can’t. Because if we could, we wouldn’t like it.

But why change the game? The US has been known as a world-class corrupt nation for a couple of centuries. Doesn’t consistency matter? Don’t we purchase the government we deserve? “Honest politician: One who stays bought.”

[Alley_Dweller]

@Tempe_Jeff

The only Presidential Candidate with a history of playing the market…is Hillary Clinton.

https://www.nytimes.com/1994/03/30/us/hillary-clinton-turned-1000-into-99540-white-house-says.html

If we are talking about past presidential candidates, one of the founders of Bain Capital was Mitt Romney. No, he never played the market.

[ftg]

@Tempe_Jeff

The only Presidential Candidate with a history of playing the market…is Hillary Clinton.

“only”??? Good grief.

If you have any money at all, you “play” the market. And sadly almost all the major party nominees for several decades have been quite wealthy compared to the rest of us schmoes. Just look at the Bushes.