How to Manipulate the Stock Market

The recent unusually close correlation between the price of oil and the prices of stocks offers an opportunity to manipulate the stock market.  A trader could purchase a large holding of stock index futures that would increase in value if the stock market rises, and then purchase oil futures contracts in rapid sequence in order to push up the price of oil.  The price jump in oil would, presumably, pump up stocks.  The stock index futures would rise in value and the trader could sell them for a quick profit.  An individual person couldn't do this, except one who is exceptionally wealthy.  But large hedge funds and other financial entities might have enough funding to pull this off.  It could be done in the U.S. markets, and some foreign markets (since the oil-stocks correlation isn't limited just to the U.S. markets).

Doing something like this could be seriously illegal.  Kids, don't try this at home, not unless you want to be a long term guest of the U.S. government at a facility not of your choosing.  But, as hardly needs to be said, not all participants in the financial markets observe the highest degree of fidelity to legal requirements.  Mega bucks could be made this way, and for some, money talks even if getting it involves stepping off the curb.  Hopefully, financial regulators worldwide are tuned into this possibility.  The recent exceptional volatility in the oil markets, and consequential sympathetic gyrations in stock prices, could raise the specter of shenanigans.  Some financial markets players are big thinkers, and will do very aggressive things to make big money.  Regulators need to think as big in order to keep up with them.