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MARKET LEADER Premier Website Lessons 30 December 2014

UPPER INTERMEDIATE

UNIT
Building Relationships/Success

Starting Up
How is the sale of stocks, shares and commodities organised in your country?
How much regulation is there?

Vocabulary 1
Match each word from the text to its meaning. Use a dictionary if necessary.

1. explicitly a. defined
2. array b. clearly
3. stance c. illegal
4. outlined d. mathematical formulas
5. to set out e. not following rules
6. to prohibit f. position
7. to adopt g. range
8. proprietary h. to choose
9. algorithms i. to decide
10. to gauge j. to describe
11. to spoof k. to estimate
12. illicit l. to not allow
13. violation m. to trick
14. to weigh n. trademarked

Vocabulary 2
Look at each of the words or phrases from the text and decide which meaning is correct. Use a dictionary if
necessary.

1. a delicate position a) a future problem b) a difficult situation

2. choking off a) restricting b) encouraging
3. first line of defence a) main protection b) official organisation
4. judgment calls a) quick decisions b) subjective decisions
5. kick-start a) stimulate b) prevent
6. shenanigans a) trickery b) payment

Reading Comprehension

Read the article and decide if the sentences are true, false or not given.

1. The Intercontinental Exchange is trying to control electronic trading groups more effectively.
2. The ICE has not yet defined which practices are disruptive.
3. Both ICE and CME are trying to make sure companies follow the rules while at the same time not
preventing trade.
4. “Spoofing” is very common.
5. Such strategies can take place in millionths of a second as traders use algorithms to gauge the price
level and depth of a market. One trader was fined $1.6m.
6. An executive at one trading firm says the rules may be interpreted subjectively.
7. The “momentum ignition” strategy is always a potential violation of the rules.
8. ICE market regulation officials have been put under pressure by some companies.

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MARKET LEADER Premier Website Lessons 30 December 2014

UPPER INTERMEDIATE

UNIT
Building Relationships/Success

ICE bans ‘disruptive trading’ strategies

Intercontinental Exchange has explicitly banned an array of market strategies — from flooding its systems
with data to tricking others by cancelling orders — in a tougher stance towards electronic trading groups.
Two of ICE’s commodity futures exchanges in New York and Canada late on Monday outlined rule
changes that set out detailed lists of prohibited “disruptive trading practices”. They are to take effect on
January 14, about four months after exchanges owned by rival CME Group adopted similar rules.
Both ICE and CME are in a delicate position, seeking to keep markets fair without choking off volumes
from proprietary traders. As self-regulatory organisations they are the first line of defence against abuse. As
for-profit exchange operators, they depend on active trading groups for liquidity and revenue.
Disruptive trading was made illegal under the 2010 US Dodd-Frank financial reform law. Last year, the US
Commodity Futures Trading Commission issued further guidance on banned types of trading including
“spoofing”, or entering bids or offers with the intent to cancel them before completion.
Such strategies can take place in millionths of a second as traders use algorithms to gauge the price level
and depth of a market. One trader is fighting criminal charges that he designed computer programs to spoof
commodity and currency futures markets for an illicit $1.6m in profit.
ICE said it was now providing “additional clarification” on disruptive practices which were prohibited.
These included entering orders with “intent to overload, delay, or disrupt the systems of the exchange or
other market participants” and the “intent to cancel the order before execution”.
A four-page document attached to the rule notices attempts to illuminate the changes, but an executive at
one trading firm warned the rules appeared to rely heavily on judgement calls by exchange regulatory
officials.
ICE said that using a “momentum ignition” strategy to kick-start price movements was a potential violation
of the rule, but only if a trader also intended to disrupt orderly or fair trading, was reckless or misleading or
engaged in other shenanigans.
Iceberg orders, which divide large orders into segments that are visible to and hidden from the market,
would not violate the rules unless used to mislead other participants.
The document adds that ICE market regulation officials “may consider a variety of factors”, including a
trader’s historical pattern of activity and actions in related markets, as they weigh bringing a case.

Grammar – Multi-word verbs

Which sentences are grammatically incorrect?
1. We set out our proposals.
2. We set our proposals out.
3. Steve looks after it.
4. Steve looks it after.
5. I won’t put up with these shenanigans anymore.
6. I won’t put with these shenanigans up anymore.
7. They choked off our liquidity.
8. They choked our liquidity off.
9. Can you look our visitor after, please?
10. Can you look after our visitor, please?
11. Can you help me out?
12. Can you help out me?

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MARKET LEADER Premier Website Lessons 30 December 2014

UPPER INTERMEDIATE

UNIT
Building Relationships/Success

KEY
Vocabulary 1

1. b
2. g
3. f
4. a
5. j
6. l
7. h
8. n
9. d
10. k
11. m
12. c
13. e
14. i

Vocabulary 2
1. b
2. a
3. a
4. b
5. a
6. a

Reading Comprehension
1. T
2. F
3. T
4. NG
5. F
6. T
7. F
8. NG

Grammar
Incorrect: 4, 6, 9, 12

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