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QuoteOriginally posted by: fars1d3sA lot of bank traders use a tactic called "stop-hunting" where they move the markets toward levels where lots of stops are concentrated, executing them, and then letting the markets move back so they can book the profits. Do you think this ethical ?Did you read that out of some 20 year old book ? Most traders aren't going to show their hand so readily these days, and a lot of gaming goes on so you can't take what you see at face value.

QuoteOriginally posted by: mwamQuoteOriginally posted by: fars1d3sA lot of bank traders use a tactic called "stop-hunting" where they move the markets toward levels where lots of stops are concentrated, executing them, and then letting the markets move back so they can book the profits. Do you think this ethical ?Did you read that out of some 20 year old book ? Most traders aren't going to show their hand so readily these days, and a lot of gaming goes on so you can't take what you see at face value.No, this is what I read on a variety of websites recently. This also happened to me personally, where I was forced to close out some options positions at disadvantageous prices. I was killed in USDCAD and GBPUSD, but after finding out about this, I managed to survive in EURUSD.

QuoteA lot of bank traders use a tactic called "stop-hunting" where they move the markets toward levels where lots of stops are concentrated, executing them, and then letting the markets move back so they can book the profits. Do you think this ethical ? This is useful for bank traders when options expire(exercised) in FX. They are usually able to move the market right before the seconds of exercise time of options if they know their clients have big positions. However it's harder and riskier to do it for the spot stop-loss orders, sometimes they get burned trying to trigger orders on the spot or they can't even move the market.

Quote This is useful for bank traders when options expire(exercised) in FX. They are usually able to move the market right before the seconds of exercise time of options if they know their clients have big positions. However it's harder and riskier to do it for the spot stop-loss orders, sometimes they get burned trying to trigger orders on the spot or they can't even move the market.Thank you for confirming. I consider this very unethical.

QuoteI consider this very unethicalI know fire burns where it falls but in this case, whether what they do is ethical or not depends on your perspective. If you are choosing not to hide your orders with all the tools and different order types you have at your disposal, I think that's a mistake on your part. It's a fair game that they are only doing this when ever people are willing to open their hands. It's like a poker game. If you are willing to open your cards to other players you don't expect them not to use that information to their advantage, after all everybody is trying to make money. If there were no order types or ways of hiding your orders and they would take advantage of that I would agree with you, however that's not the case. Also on the flip side since you know what they are doing, it's also a fair game that you can model this behavior and make money whenever they are trying to push the markets. I believe it's individual's responsibility to do their work ahead before trading these markets to understand how everybody trade and how that effects your trading.

Sorry for being a bit naive.But what is the best way of going about hiding your options? Especially before they trigger.

QuoteThis is useful for bank traders when options expire(exercised) in FX. They are usually able to move the market right before the seconds of exercise time of options if they know their clients have big positions. However it's harder and riskier to do it for the spot stop-loss orders, sometimes they get burned trying to trigger orders on the spot or they can't even move the market.Which markets are you refering to? Do you have any idea how much capital it would take to move any major currency pair by one big figure? It's certainly possible, but I simply don't believe that attempting to move the market for some options expiries happens.

QuoteOriginally posted by: fars1d3sA lot of bank traders use a tactic called "stop-hunting" where they move the markets toward levels where lots of stops are concentrated, executing them, and then letting the markets move back so they can book the profits. Do you think this ethical ?If one can argue that "stop-hunting" is unethical, then one can also argue that using stops is also unethical. The intention of a stop-loss is to dump a position that the trader thinks will suffer further loses. But if a trader truly believes that the security will suffer further losses, how can they ethically sell it to another human being? A stop-loss order is just an automatic scheme to find the greater fool and a stop hunter is just a means of making a greater fool out of someone who was seeking a greater fool.