Feb

13

Leaving aside the issue of the house's edge, if you make a mistake you have no recourse. If the house (or in this case one of it's suppliers) makes a mistake the Casino will get its money back.

In markets there is something similar in the form of "clearly erroneous trades"

While theoretically this policy could be used to protect you, I would imagine that it really only protects the big boys. However, I have no experience in this.

Does anyone have any experience that they can share?


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  1. Andrew Goodwin on February 13, 2015 8:03 pm

    So the regulators reveal the precise prices that are not “clearly erroneous.” All the sharp player needs to do is have his computer float bids one tick above the clearly erroneous limit at all times with automatic changes as prices move. One places offers one tick below the clearly erroneous limit at all times and makes changes automatically as prices change.

    That way, anytime you get a fill far out of line with the market, you do so with certainty that they won’t reverse the execution. The fill price is the most advantageous possible.

    Once the regulator defines the exact price that will not lead to a busted fill, then that is the price to target for the floating limit orders strategy.

    It might help market structure and confidence better if the regulators defined any effort to consistently skirt the effort to avoid erroneous trade prices as a general fraud. The perpetrator, if guilty in a systematic way should pay back a multiple of the instant arb profit.

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