Chicago Judge Shows Leniency To The "Hound Of Hounslow" Who Made Almost $50 Million And Caused The Stock Market To Crash
(Source)--Now 42, Navinder Sarao is a self-taught stock market trader who helped cause panic in US markets in 2010 from a bedroom in his parents' home in Hounslow, West London.
He was arrested in 2015 for his part in the "flash crash"- in which financial markets briefly plummet in value. In this case it lasted less than an hour, wiping almost $1tn off shares before markets recovered.
I can NOT wait for this movie to come out. I don't think anyone has purchased the rights or anything, but the story is incredible. Self-taught trader wheeling and dealing from his parents' house is England and bring home 50 million bucks and a sweet ass nickname. "The Hound Of Hounslow" sounds like a Netflix series already. He was trading remotely on the Chicago Mercantile Mart and made his own software to beat the market. Here is the official explanation
On this index, every time an order was placed to buy or sell, "high frequency traders" - many of them not human but computers running algorithms - would try to make their own trades milliseconds before those orders could be executed. That way, they could be the first to make money from market changes.
Sarao realised that the high frequency traders all used similar software. That made the market twitchy - like a flock of sheep, all moving in the same direction.
His software took advantage of this by placing thousands of orders before quickly cancelling or changing them, once he had created artificial demand for other traders to buy or sell that asset.
This practice - known as "spoofing" - allowed him to make genuine buy or sell orders at a profit as the price swiftly rose or fell.
This is one of those times where I wish I was smarter or had studied computer programming in college or something. Hell I wish I knew for certain off the top of my head that a computer programming degree is the type of education I would need to design a scheming software like this, but I don't. It's a get rich quick plan that I have been dreaming of my entire life and the only thing holding me back is my own brain.
I would love to know what was going through his mind when he pushed it just a little too far and the entire stock market crashed for an hour. I mean, globally, stock prices fells by like a TRILLION dollars for an hour.
Me...I would shut my computer and hide under the covers. The Hound...well he likely didn't do anything. He has been diagnosed with Autism. According to his defense beating and influencing the stock market was the same to him as "beating a video game". I wasted YEARS playing NCAA Football. I turned Colorado into a powerhouse which is pretty much the equivalent of $50M in the bank. Level up, son. Tank a trillion...game over. It's an incredible story. He truly didn't care about the money, or didn't realize it. The only thing he spent money on was a used Volks Wagon. He was just swinging the entire global economy for the love of the game. Something to do to pass the time. Good on the Judge for what feels like a proper justice.
If you want a better and more thorough explanation of what The Hound did watch this video.