Definition of Rigged Markets

What does the term rigged markets mean? What is meant by the term "rigged markets"?

The term "rigged markets" refers to the perception that the market is "rigged" in favor of the "big boys". By "big boys", people mean big banks, big brokers, big hedge funds and other people with big money.

Definition of Rigged Markets - Financial DictionaryBy "rigged", people mean that certain participants in the markets have a major advantage over Joe and Jill Average. What types of advantages could this include? How about certain players receiving access to information before the general public (the SEC has tried to address this in previous years with Reg FD)? How about major players colluding to screw the little guys (pattern daytrader rule anyone?) How about the major players writing the rules to benefit themselves? How about major players pulling off amazingly egregious scams and getting away with it (including the peddling of subprime mortgage debt as AAA paper), while little guys go to jail by carrying out small pump and dump scams? (small in general $ terms compared to the big scams that are pulled off by the big players).

This is what people mean by "the markets are rigged". And yes, my friends, the markets are rigged.

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