Because it gained speed in thin air. There is no liquidity to support these valuations unless shares are circulating in tight loop with nobody actually owning them for longer than split second. Then you can create artificial liquidity keeping those lofty valuations. Speed is your friend like in windsurfing.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Anadarko flash crash raises questions about market structure rules
- Thread starter OnClose
- Start date
Because it gained speed in thin air. There is no liquidity to support these valuations unless shares are circulating in tight loop with nobody actually owning them for longer than split second. Then you can create artificial liquidity keeping those lofty valuations. Speed is your friend like in windsurfing.
Quote from RedDuke:
I read/heard in multiple places, that it will take more of these events to alter HFT macro seconds trading. If sub penny will not be allowed and liquidity providers will be forced to keep their quotes for 10th of a second, 1 second or something like that, it might make these crashes a lot less frequent occurrence. Basically, the system needs to be slowed down.
the system need to have not only 'rights' and exemptions for all those 'pro' participants,but also -OBLIGATIONS. they have none now. MM's are bad,but at least there is some rules and certain obligation to maintain orderly market. now we have market,where everyone who is a 'pro' can do whatever the f** they want,but without any obligation to protect their place of 'work'. they can rape you anyway they want and this is precisely what they do. i would do the same,if i'm allowed to. look at the spreads between bid and asks. i've seen jumps as big as 10% DURING THE REGULAR SESSION
this piece of s** system is corrupted to the bone,no better than damn Greece or rest of the Europe
Quote from panzerman:
Trades will likely be voided, but one possible play would be to have a standing limit buy of 0.01 on all SP500 stocks each day.
dude..look at the nanex charts. they only showed the big ones,who knows,how many other securities are affected.you can't bust those trades on SPY or other ETF'S(where APC is a big part of it). you can's bust options on them. you just can't. i said above-it's like a domino effect. imagine not one,but 5 major stocks drop like this
Quote from RedDuke:
I read/heard in multiple places, that it will take more of these events to alter HFT macro seconds trading. If sub penny will not be allowed and liquidity providers will be forced to keep their quotes for 10th of a second, 1 second or something like that, it might make these crashes a lot less frequent occurrence. Basically, the system needs to be slowed down.
Market can go slower but at much lower valuations. Over the years tons of paper (bonds, shares, derivatives) has been printed (check the market capitalization curve). Money to cover it does not exist yet. That is where HFT comes in. It keeps the illusion of liquidity to maintain unrealistic price levels.
Quote from vicirek:
Market can go slower but at much lower valuations. Over the years tons of paper (bonds, shares, derivatives) has been printed (check the market capitalization curve). Money to cover it does not exist yet. That is where HFT comes in. It keeps the illusion of liquidity to maintain unrealistic price levels.
You make it sound as though theres four people in the market and the rest is HFT ~ No one owning a share for more than 1 second as part of a grand conspiracy and if HFT went everything would fall to 2 cents over night...
Quote from sheda:
You make it sound as though theres four people in the market and the rest is HFT ~ No one owning a share for more than 1 second as part of a grand conspiracy and if HFT went everything would fall to 2 cents over night...
I do not make sounds. I add and subtract numbers.
You are wrong. It is actually 5c.
Where conspiracy theory comes into play here unless you are paid to troll internet to discredit inconvenient facts?
Quote from vicirek:
I do not make sounds. I add and subtract numbers.
You are wrong. It is actually 5c.
Where conspiracy theory comes into play here unless you are paid to troll internet to discredit inconvenient facts?
Are you going to tell us theres 500 trillion evil derivatives about to wipe the global economy next? Then maybe you will start repeating BUBBLE BUBBLE BUBBLE BEN! Add in a bit of SCUM HFT!..then a dash of I was right! Hey lets go the whole way, maybe you can end with THEY JUST LOSE!!
I love the way people take complex issues with aspects that do need adressing then add their extremely simple all encompassing explination of why, actually, eveyrthings a billion times worse:
Well they printed "tons" of paper and stuff and the paper to cover it aint there and thats where this comes in so without it everything would be worth nothing.
Quote from sheda:
Are you going to tell us theres 500 trillion evil derivatives about to wipe the global economy next? Then maybe you will start repeating BUBBLE BUBBLE BUBBLE BEN! Add in a bit of SCUM HFT!..then a dash of I was right! Hey lets go the whole way, maybe you can end with THEY JUST LOSE!!
I love the way people take complex issues with aspects that do need adressing then add their extremely simple all encompassing explination of why, actually, eveyrthings a billion times worse:
Well they printed "tons" of paper and stuff and the paper to cover it aint there and thats where this comes in so without it everything would be worth nothing.
First of all APC is NYSE stock and specialist model of market making is failing again due to liquidity constrains. It happens again and again and NYSE might not be interested in letting people realize that they have problems.
Second I do not make up stuff or try to label things as bad or good in regards to disparity between valuations and available liquidity. This is one of the factors that has to be considered.
It is not me who comes up with simple explanations and easy solutions as media and many participants on this forum seem to know that the problem is HFT and subsecond market speed. I am not so sure that this is all what has to be considered for these repeating events of market misfire.
Quote from Bob111:
the system need to have not only 'rights' and exemptions for all those 'pro' participants,but also -OBLIGATIONS. they have none now. MM's are bad,but at least there is some rules and certain obligation to maintain orderly market.
In 1987 crash (and other crashes too) market makers did not pick up phones and did not feel like they had any obligations.
And in 2013 APC NYSE specialist did not feel like they have any obligation to maintain fair and orderly markets in NYSE listed stock.
Simple solution, no more market orders... The CME doesn't have them.