U.S. regulators probe "mini-manipulation" of stocks, options

(Reuters) – Regulators are getting more complaints about the alleged “mini-manipulation” of stocks so that favorable positions can be established in stock options, the head of the securities’ industry watchdog organization said on Thursday.
Some firms appear to have algorithms – the computer code that carries trading instructions – that move the underlying equity, said Rick Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority.
“In some cases we are concerned about manipulation of the underlying equity in order to establish options positions at favorable prices or manipulate the options implied volatility,” Ketchum told a conference of the Securities Traders Association in Washington.
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