Are the prices of e-minis such as S&P 500, Russell 2000, EUROSTOXX, etc. manipulated? That is, are there traders who trade large enough positions to make the price go in the direction they want, taking unfair advantage of the rest of the traders in that market?

If so, what implication does this have for designing any trading systems for those markets? Is it essentially a fool's errand unless you have enough money to be one of the "manipulators"?

I once heard an experienced trader say (to retail traders):

The first thing you have to understand about this market is that this market was not created for you to make money. It was created for the big players to make money - from you!

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    $\begingroup$ I am sure the regulators would be please to see any hard evidence you can unearth for this. $\endgroup$ Commented Feb 1, 2011 at 13:00
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    $\begingroup$ Oh, I didn't expect anyone to answer with "hard evidence" - but I guess the downvotes are a bit of an answer in themselves. $\endgroup$
    – EMP
    Commented Feb 1, 2011 at 21:56
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    $\begingroup$ +1 for an honest question. I read about this situation happening somewhere around last November (if I remember correctly) when market was closed soon after opening in morning. Investigation by SEC found out later a manipulative technique used by a small trading company in some state (I can't recall the name!). It bought huge amounts of stock in very short time. $\endgroup$
    – user98
    Commented Feb 2, 2011 at 6:21
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    $\begingroup$ In general, the possibility of arbitrage prevents this from happening. If the e-mini price differs too much from the full-size futures price, you can just buy/sell enough e-minis and counterbuy/sell the full-size future for an instant profit. In fact, if someone buys/sells a lot of e-minis, arbitragers will close the price gap quickly, sometimes with disastrous results: aswathdamodaran.blogspot.com/2010/05/… (2010 Flash Crash) $\endgroup$
    – user59
    Commented Feb 3, 2011 at 9:02
  • $\begingroup$ @Dirk Eddelbuettel: regulators are well aware of market manupulation, as a matter of fact there are currently several investigations on layering cases... and yes that's on index futures $\endgroup$
    – statquant
    Commented Jun 21, 2015 at 16:01

4 Answers 4


Arbitrage absolutely does not prevent a derivative (option, future, or otherwise) driving the price of the underlying. In fact, arbitrage, or the elimination of it, is what causes the "tail wagging the dog" phenomenon of large trades in the derivative causing wild swings in the underlying.

see the may 2010 flash crash that started with some large e-mini futures trades.



Markets adjust with the impact of incoming orders. A large buyer will send the price up in any market.

Don't let the mini in the name fool you, the emini S&P is one of the most liquid futures contracts in the world. The futures market often has more volume available in the best couple ticks than the equity markets that it is based on.


It's like a giant game of tug-of-war except there are many ropes and thousands of participants. The SPY tugs at the ES, which tugs at the SPY, which tugs at other ETFs.

I suppose in theory you could manipulate the ES in a low volume setting by selling a huge block in the thinly-traded period before 12AM PST, selling enough to make the price fall 1/2 -1% and hope the price remains depressed until the liquid normal trading session, and use the depressed price as an opportunity to initiate option trades or buy many more shares at a cheaper price.


We will know the answer to this question when Navinder Singh Sarao is put on trial in the United States on charges of doing precisely this.


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