3Red Trading, LLC

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3Red Trading, LLC (now 3Red Partners)
Founded	2011
Headquarters	Chicago, Illinois
Key People	Igor Oystacher, managing partner and chief executive officer
Products	Proprietary high-frequency futures and options trading; quantitative strategy development and execution
Website	https://www.3redpartners.com

3Red Trading, LLC is a Chicago-based proprietary trading firm founded in 2011 that trades futures and options contracts across major U.S. and global derivatives exchanges using high-frequency and quantitative strategies.

The firm operates in futures markets for equity index, energy, metals, and volatility products. At its peak trading activity in the early-to-mid 2010s, the firm was among the most active participants by contract volume on exchanges operated by CME Group and the CBOE Futures Exchange (CFE). 3Red Trading LLC later rebranded as 3Red Partners and continues to operate as a technology-driven trading firm that develops and deploys algorithmic and quantitative trading strategies across global derivatives markets.

History

Founding and Early Operations (2011–2013)

Igor Oystacher and Edwin Johnson incorporated 3Red Trading, LLC on October 4, 2011, in Illinois, initially operating out of temporary space in the former Chicago Board of Trade (CBOT) building at 440 South LaSalle Street in Chicago. Oystacher and Johnson had previously worked together at Gelber Group, LLC, a Chicago-based proprietary trading firm where Oystacher had risen to lead the firm's S&P 500 futures trading desk after joining as a summer intern in 2003 and later dropping out of Northwestern University to trade full-time. At Gelber, Oystacher developed a reputation as a high-volume trader in electronic trading venues for equity index futures, generating revenue that industry observers estimated at tens of millions of dollars annually before he departed in 2010 to form his own firm.

Johnson co-founded the firm and served as its managing member and chief risk officer, holding a ten percent ownership interest. Oystacher held the remaining ninety percent and served as president, chief executive officer, and principal trader. Under their operating agreement, Johnson held authority to suspend any trader's trading privileges for cause. In addition to 3Red Trading, the firm established a related entity, UKUSA Currency Fund LP, through which additional trading activity was conducted. 3Red's principal office was located at Suite 2200, 440 South LaSalle Street, Chicago, Illinois, a building that had historically served as a hub for Chicago derivatives trading firms.

Exchange Disciplinary Actions (2012–2015)

Between 2012 and 2015, Oystacher and 3Red accumulated disciplinary sanctions from three exchanges for conduct related to order placement practices in futures markets. CME Group fined Oystacher $150,000 in November 2014 and suspended him from trading on CME venues through December 28, 2014, following investigations by NYMEX and COMEX — two CME Group divisions — into alleged manipulation in crude oil and metals futures. The CME disciplinary orders found that Oystacher had engaged in conduct involving improper order placement across multiple trading sessions.

The Intercontinental Exchange (ICE) and Germany's Eurex exchange separately sanctioned Oystacher for similar conduct. In May 2015, Eurex banned Oystacher from trading for 30 days and fined him a total of €340,000 ($364,656) for two separate incidents of spoofing on its platform. Across the three exchanges — CME Group, ICE, and Eurex — Oystacher received a combined total of approximately $660,000 in fines through eight separate disciplinary proceedings over the four-year period, in each of which he neither admitted nor denied wrongdoing. These exchange-level actions preceded and informed the CFTC's subsequent federal enforcement proceeding.

Departure of Edwin Johnson and Internal Dispute (2013)

In May 2013, following the CFTC's publication of guidance on disruptive trading practices under the Dodd-Frank Wall Street Reform and Consumer Protection Act, Johnson reviewed 3Red's trading activity and concluded that certain of Oystacher's order-entry strategies constituted spoofing. Johnson demanded that Oystacher cease the conduct or face suspension of his trading privileges under the firm's operating agreement. Oystacher terminated Johnson from 3Red on June 17, 2013. The parties subsequently entered into a confidential settlement agreement. Johnson later alleged in federal court filings that the settlement agreement contained provisions restricting him from speaking to regulators — provisions he argued were unenforceable as against public policy under the Dodd-Frank whistleblower protection framework.

CFTC Civil Enforcement Action (2015–2016)

The CFTC had opened a formal investigation into 3Red and Oystacher in 2012, issuing document preservation requests and subpoenas to the firm and its principals. On October 19, 2015, the CFTC filed a civil complaint in the U.S. District Court for the Northern District of Illinois against Oystacher and 3Red Trading LLC, alleging they had engaged in a manipulative and deceptive spoofing scheme across five futures contracts — E-Mini S&P 500, copper, crude oil, natural gas, and VIX futures — on four exchanges over at least 51 trading days between December 2011 and January 2014. The complaint alleged more than 5,200 instances of the alleged spoofing pattern. 3Red's chief compliance officer, Greg O'Connor, described the allegations as "entirely unfounded" and stated the firm would defend its trading practices in court.

The CFTC alleged that Oystacher's method involved manually placing large passive orders near the best bid or offer to create a false impression of liquidity and market interest on one side of the book, then canceling those orders fractions of a second later while simultaneously placing aggressive orders on the opposite side to trade against market participants who had responded to the apparent depth. The complaint further alleged that Oystacher exploited a function of the exchange match engine called a "wash blocker" — a tool designed to prevent self-trading — to cancel the spoof orders before they could be filled against his own aggressive orders. Oystacher also used iceberg or hidden-quantity orders to partially conceal the size of his positions during the scheme.

On December 20, 2016, U.S. District Judge Amy J. St. Eve entered a consent order of permanent injunction against Oystacher and 3Red. The order imposed a $2,500,000 civil monetary penalty, permanently prohibited the defendants from engaging in trading that creates a false or misleading impression of market depth or book pressure, appointed an independent trading monitor for three years, and required 3Red's chief compliance officer to file a monthly sworn affidavit attesting to compliance with court-ordered restrictions. James G. Lundy, a former attorney at the Securities and Exchange Commission and then a partner at Drinker Biddle & Reath, was appointed as independent monitor. Oystacher and 3Red neither admitted nor denied the allegations.

Rebranding as 3Red Partners

Following the resolution of the CFTC enforcement action, the firm continued operations and, at some point, rebranded as 3Red Partners. As of 2026, Oystacher holds the title of managing partner and chief executive officer at 3Red Partners, which describes itself on its website as a firm that bridges technology and trading, deploying quantitative research methods and a proprietary research platform to develop, optimize, and execute trading strategies.

Controversies

The firm's most significant public controversy was the CFTC civil enforcement action, CFTC v. Oystacher and 3Red Trading LLC (Case No. 1:15-cv-09196, N.D. Ill.), described in detail in the History section above. The case was one of several high-profile spoofing enforcement actions brought by the CFTC in the 2015–2016 period under the anti-spoofing provisions of the Commodity Exchange Act added by the Dodd-Frank Act — a period that also included enforcement actions against Michael Coscia and U.K. trader Navinder Singh Sarao in connection with the 2010 Flash Crash. The Oystacher-3Red case was notable among them for the scope of the exchange disciplinary record that preceded it, the complexity of the alleged mechanism (use of wash blockers and iceberg orders), and the firm's publicly contested defense that its trading reflected sophisticated risk management and legitimate strategy rather than manipulation.

A collateral controversy arose from the departure and subsequent litigation involving Edwin Johnson, 3Red's former chief risk officer and ten percent owner. Johnson filed suit against Oystacher in federal court in 2015 (Case No. 15-cv-02263, N.D. Ill.) alleging RICO violations and retaliatory termination, claiming he had been removed from the firm after raising concerns about Oystacher's trading practices and that a post-termination settlement agreement had been structured to prevent him from communicating with regulators. U.S. District Judge Andrea Wood dismissed the lawsuit in October 2018, finding the allegations did not support a civil RICO claim and that the CEA's whistleblower protections did not extend to individuals who had not yet made a voluntary submission to regulators. Johnson's subsequent application for a CFTC whistleblower award was denied and that denial was affirmed by the U.S. Court of Appeals for the Seventh Circuit in February 2023 (Case No. 22-1692).