Monday, May 10, 2010
The elusive 'people'
Bloomberg: SEC Meeting With Exchanges Yields No Cause for Plunge
Heads of the biggest U.S. trading venues could provide no clear reason for last week’s stock- market selloff in meetings today with the Securities and Exchange Commission, two people familiar with the matter said.
Chief executive officers saw no evidence that a mistaken order caused the plunge, according to the people, who asked not to be named because the discussions were private.
Schapiro and representatives from the NYSE, Nasdaq and other trading venues discussed the need to revise market-wide circuit breakers and implement halts for individual stocks, the people said.
The New York Stock Exchange currently has circuit breakers that pause trading when the entire market falls 10 percent
Posted by devo @ 11:46 PM (671 views) Add Comment
15 Comments
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1. icarus said...
"No cause for plunge"
See http://gonzaloraffoinfonews.blogspot.com/2010/05/day-market-almost-died-courtesy-of-high.html
2. Uro_who said...
I can't see the above article. I know many a sniffy about technical analysis but the fact is that the crash came after a 'inverted hammer' candlestick was posted after a days trading. This was when the DJIA had hit the 61.8% Fibonacci level. Traders all over the world saw that as a danger sign and down went the markets. One reason why the ECB money may not answer all of the issues.
3. techieman said...
Plunge what plunge? - Paranoia Blue told me there was none. Wake up Icarus, you have just had a bad dream.
For his benefit : "when the US market dropped 481 points in 6 minutes and recovered 502 points just 10 minutes later". Right i have said all i have to say on this issue. I truly hope they sort it out but my worry is they wont.
4. paranoia blue said...
techie
I think there must be some misunderstanding :)
It was great – the massive machine-manipulated drop - I made a bunch, and thankfully closed all my shorts, before the weekend.
However I opened a whole bunch more, yesterday, after the “silly spike” upwards, and they are paying off. I’ve already closed a few as I type, because you don’t make money until it is in the bank. ATB
5. techieman said...
Monday morning quarterback PB?
"27. paranoia blue said... “Techers” @23 Not quite sure what you mean by massive spreads in the markets that I deal! "
Read Icarus' link and then you might have a clue. Its fine you saying you made this made that , did this did that, but to ignore what has been (so far) one of the biggest market dislocations in history , doesnt do credibility much good. To then say you "have to trade markets" to make money is downright irresponsible. It basically scared the sh1t out of me.... and i was on the right side!
6. paranoia blue said...
By “massive spreads” I was referring to individual share spreads –between the buy and sell price! – especially on AIM.
Re: trading. Over the last decade the Market hasn’t made much real money, at all.
As I mentioned, earlier I use a couple of overall default positions as far as the economy is concerned, and focus on volatile, low spread shares, and indexes, and trade, both long and short depending on the sector. ATB .
7. refusetobuy said...
The scary thing was that it hit many shares and even the FX markets. Any short gamma position would have been nasty. All that is needed is a 20ms delay on all trades. This would remove HFT and level the playing field between machines inside the exchange and those outside.
Not sure this would happen because then the exchanges lose business to the 'dark pools'. People who want to trade this fast will find their own counter-parties.
8. refusetobuy said...
gonzaloraffoinfonews has the worst font ever, and why are random words coloured red. You'd think he doesn't want anyone to read his stuff.
9. This comment has been removed as it was found to be in breach of our Blog Policies.
10. Paranoia Blue said...
I agree.
HFT is quite simply robbery by the big financial institutions. I see it as being exactly the same to the old tapping into the telegraph line to the bookies, and putting on bets when the results of a race were known.
PS It would be interesting to see the actual trading volumes if this con were to be removed.
11. paranoia blue said...
HFT is quite simply robbery by the big financial institutions. I see it as being exactly the same to the old tapping into the telegraph line to the bookies, and putting on bets when the results of a race were known.
PS It would be interesting to see the actual trading volumes if this con were to be removed.
12. flashman said...
refusetobuy: as usual your ideas are eminently sensible and informed. However all they really need to do is to charge a fee for the issuing and canceling of orders, within milliseconds. This millisecond 'bait and switch' is the enabling mechanism and if there was a fee incurred for frequent cancellations, the HFT game would effectively be over.
13. flashman said...
"It would be interesting to see the actual trading volumes if this con were to be removed."
The latest estimates say that between 72% and 75% of all equity trades are HFT trades
14. paranoia blue said...
FM @ 10
Yes, thanks, that puts things in a very scary perspective.
15. flashman said...
I should perhaps explain why the HFT computers issue and cancel orders within milliseconds. They do this to find out the top price that non computer buyers/investors are willing to pay. The computers then move the price up to within a cent of this price (by issuing and cancelling orders) and start offering shares at this price. It is crazy that the exchanges permit them to do this and it is arguably illegal. If these HFT millisecond cancellations incurred a fee, it would make this process too expensive and the game would be over