Once again a trader has figured out that the cross block functionality can be used to cancel orders used in spoofing. A trader was just fined $90K, forced to disgorge just less than $12K, and was suspended from trading on an CME platform for 30 days. The system used was simple:
1. Enter trades above the offer or below the bid; and
2. Wait for others to join; and
3. Hit the bid (or left the offer) - knowing that the crossblock functionality would prevent him (in this case) from executing and would cancel the resting order.
This is the second time in my memory that someone has been disciplined for exactly the same system of activity. As I like to tell my clients, having this happen as a rare occurrence may not trigger alarms. The disciplinary notice talks about activity between February to March in a single year across multiple contracts. This stops being an accident and starts looking like a pattern.
Do you look at things like this? The notice is here - https://www.cmegroup.com/notices/disciplinary/2017/11/cbot-16-0489-bc-timothy-roach.html#pageNumber=1