Topic: How exchanges steal our money - page 3. (Read 627 times)
What you are saying isnt something unknown neither it is shady enough to say that exchanges steal your coins. Each exchange has certain working strategy, 2 second delay sometimes might even not be intentional but something the api needs to list the order.
I guess they do it just to make an extra income on their platform despite of a big fees on every trade in some platform.
I don't understand why you consider this to be theft. Exchanges have always had a difference between buying and selling prices ( the spread ). Banks do it with fiat transactions, and they often charge an additional commission on the trrade.
I heard last week about how Stocks Exchange is allegedly using coins to create Masternodes from them. Not sure if that is true, and not entirely sure if that is shady but it is unethical on some level that is for sure.
But with nobody regulating them some exchanges can do dirty dealing. That is the whole point of regulation. To try and make sure people are not cheated.
Many people have reported that they noticed a lot of shady behavior on the part of exchanges, and here I want to discuss specific methods which many, if not all, exchanges employ to steal our money. I know of at least 2 risk-free methods which are in the store ready to be used on trading folk:
1. Exchange sees a big sell or buy order entering the system which would fill a lot of orders in the orderbook at prices higher or below the price set by the trader. In this case, exchange can itself sell or buy all these orders first and then fill the entering order at its specific price. The effect is that the exchange earns profit while the trader gets his order filled at maximum or minimum possible price. This method works exceptionally well with market orders filled at the current market price. Guess what price it will be.
2. Exchange can set arbitrary delays while adding new orders. For example, WEX (former Btc-e) officially sets a 2 second delay within which a trader doesn't know what's going on at the exchange. In this case, if exchange sees a big order, it can delay adding it waiting for another big order to arrive. If these orders are offsetting each other, exchange can then fill them itself and put the spread in the pocket. This approach works particularly well with exchanges that have lots of liquidity.
If you know of other dirty tricks that exchanges use, share them here.
1. Exchange sees a big sell or buy order entering the system which would fill a lot of orders in the orderbook at prices higher or below the price set by the trader. In this case, exchange can itself sell or buy all these orders first and then fill the entering order at its specific price. The effect is that the exchange earns profit while the trader gets his order filled at maximum or minimum possible price. This method works exceptionally well with market orders filled at the current market price. Guess what price it will be.
2. Exchange can set arbitrary delays while adding new orders. For example, WEX (former Btc-e) officially sets a 2 second delay within which a trader doesn't know what's going on at the exchange. In this case, if exchange sees a big order, it can delay adding it waiting for another big order to arrive. If these orders are offsetting each other, exchange can then fill them itself and put the spread in the pocket. This approach works particularly well with exchanges that have lots of liquidity.
If you know of other dirty tricks that exchanges use, share them here.
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