What you want to avoid is suspicious activity that could lead to the filing of a suspicious activity report (SAR), possibly followed by the closing of your account or regulatory enforcement action. Investment success is not considered a red flag for suspicious activity, but the success you could have with foreknowledge would arouse anyone’s suspicions. You should limit yourself to trades that could not reasonably be made on inside information, such as investments in ETFs that rise as a result of broad market activity, and don’t get greedy - steer clear of big investments in options and in companies that are about to announce takeover bids or earnings surprises. If you confine yourself to doubling your money each month (an easy goal if you know what will happen every day in advance), it should be easy to invest in such a way that extraordinary luck is the only plausible explanation.
This assumption right here is putting you off in la-la-land. People making large trades do affect stock prices, and if you’re going to be trading tens of millions of dollars in a single month, you’re making large trades.
Just like in Vegas, the pit boss in the stock exchange would soon take notice, and take you out back with his cronies to “have a little chat”.
Good luck!
You would probably want to increase your initial nest egg pretty quickly. You have so much information you could bet it all on spiv stock A, and quadruple your money the first month. Take most of the money out and split it between several on line brokerages. Do the trading yourself so there will be no one that might notice so easily.
Buy some deep out of the money options on a company you know is going to go bankrupt (buy a whole bunch of long put options that are trading for a nickel but would pay out hundreds of times if the company goes bankrupt.) Think of it this way, during the big reset, Citi started to get hammered and a bunch of people started buying the stock below $20 (let’s use $18 for an example). You know better so you buy some really outlandish put options that cost 10 cents with a $3 strike price, which means Citi needs to fall below $3 before you can exercise. Well, when Citi did fall to $2.50, those 10 cent options would now be worth something like $2.60. So, that million dollars you invested is now worth $2.6 million. Do that a few times a month and you’re golden.
Oh, and when you have a million or couple of million, get it offshore somewhere like Switzerland, Singapore or the Caymans, and then really start trading big on options.
And the same rules apply as in fight club. You do not talk about your investments or how much money you’re making.
Seems we are assuming a presumption of guilt when none exists. The SEC would need to prove beyond a reasonable doubt (criminal) or by a preponderance of the evidence (civil) that you acted on insider knowledge. Given that you have none, they’d not be able to prove the case.
That notwithstanding. a jury may very well not be swayed by your defense of time travel.
This is exactly the point I wanted to make but filmore already made it so well. With all the year’s trading data at your disposal there’s simply no reason to make any trades based on major news or earnings reports. Nobody is looking for insider traders who are illegally using magic knowledge from the future, they’re looking for people with inside knowledge.
The NYSE dollar volume for yesterday was $23,383,133,234. spudbucket only has to double his money monthly and has plenty of other stock exchanges, commodities markets, derivatives markets and forex to spread his machinations into. I think he’ll be ok.
The exchanges are intermediaries, not counterparties. They don’t care who makes or loses money.
Exactly. There is nothing illegal about making a lot of money trading. The onus would be on the regulators to establish you were doing something illegal. There are people who seriously believe they can time the stock market using astrology. I’m sure you could argue you “hear voices from space” or something similar.
But what crime would he be charged with? There are plenty of secretive funds that make a lot of money by having identified some inefficiency in the market. Just because they make a lot of money doesn’t mean they can be dragged into court and threatened with criminal penalties if they don’t reveal their proprietary strategies.
Joke.
Not time travel, but the protagonist in the movie Limitless is able to make some massively profitable trades due to lots and lots of research, and his uncanny understanding of how the market works. He doesn’t take any precautions to stay out of the spotlight, though, and… things happen. Some great, but some very, very bad.
Highly recommended.
You won’t be laughing when Biff, errr spudbucket, amasses his fortune and uses his power to transform America into a cesspool of crime and corruption.
As you note, there would probably be an investigation with no charges laid at the end, similar to the investigation over Hilary Clinton’s cattle futures trading (which increased her investment by a factor of almost 100 in 10 months).
Yes - capital gains will kill at least a third of the profits if it’s in a regular account. Even if it’s in a regular IRA, the income will be taxed when the money is withdrawn (though of course you can spread that out over years as you draw down the account).
If it’s in a Roth, however, there is no tax effect. Obviously the OP couldn’t withdraw that money any time soon (assuming the OP is under age 59 or whatever) without triggering penalties, but a Roth is the perfect vehicle for something like this.