Illustration: Sarah Grillo/Axios

Traders always aspire to "best execution" — if they're buying or selling a certain asset in the market, they want to get the best possible price. The problem is that high frequency traders (HFTs) make that extremely difficult.

Why it matters: One time-honored (yet illegal) tool for trying to outwit the HFTs is "spoofing." That's where a trader enters a series of fake orders that she has no intention of filling, to fool the HFTs about the supply and demand in the market.

Driving the news: JPMorgan has been fined $920 million for spoofing in commodity markets and Treasury bonds.

  • The CFTC, the lead agency levying the fine, calculated a curiously specific $172,034,790 as the amount that JPMorgan made from the spoofing, along with an equally specific "$311,737,008 in market losses." No indication was made of how those sums were arrived at.
  • The fine includes "restitution" of $205,992,102, to go into a "JPM Victim Compensation Settlement Fund." It's unclear who will ultimately receive that money, but it is certain to be sophisticated institutional investors who traded willingly at a given price.

Reality check: Spoofing might sometimes feel like a victimless crime, but it does deter institutions from trading, and therefore reduces liquidity and price discovery.

The bottom line: This fine is deliberately large to deter any other institutions from trying something similar. But so long as the HFT sharks are infesting the market waters, the big institutions are still going to be hesitant to swim freely.

Go deeper

The cliffhanger could be ... Georgia

Illustration: Sarah Grillo/Axios

It hasn't backed a Democrat for president since 1992, but Georgia's changing demographics may prove pivotal this year — not only to Trump v. Biden, but also to whether Democrats take control of the Senate.

Why it matters: If the fate of the Senate did hinge on Georgia, it might be January before we know the outcome. Meanwhile, voters' understanding of this power in the final days of the election could juice turnout enough to impact presidential results.

Amy Harder, author of Generate
6 hours ago - Energy & Environment

Climate change goes mainstream in presidential debate

Photo illustration: Aïda Amer/Axios. Photo: Olivier Douliery-Pool/Getty

The most notable part of Thursday’s presidential debate on climate change was the fact it was included as a topic and assumed as a fact.

The big picture: This is the first time in U.S. presidential history that climate change was a featured issue at a debate. It signals how the problem has become part of the fabric of our society. More extreme weather, like the wildfires ravaging Colorado, is pushing the topic to the front-burner.

Finally, a real debate

Photo: Morry Gash/AP

A more disciplined President Trump held back from the rowdy interruptions at tonight's debate in Nashville, while making some assertions so outlandish that Joe Biden chuckled and even closed his eyes. A Trump campaign adviser told Axios: "He finally listened." 

The result: A real debate.