Crude flash crash about 15 mins ago... scary

[BrandNewTrader]

Yeah i was trading 10 contracts on less capital than that... no stops, eyes glued to the screen, piss breaks into empty beer bottles at the desk, etc

Just for "fun" I worked out the impact of a 25 cent move in Crude, if I was holding the largest possible position I've ever seen in my backtest (4 contracts), based on my capital (£400K).

The answer: 0.2%

GAT

 

[Overnight]

Just for "fun" I worked out the impact of a 25 cent move in Crude, if I was holding the largest possible position I've ever seen in my backtest (4 contracts), based on my capital (£400K).

The answer: 0.2%

GAT

I don't understand that calculation. If your capital is 400K, how is your largest max position possible only 4 contracts?

On 4 contracts, a $.25 move is $1,000.

 

[globalarbtrader]

I don't understand that calculation. If your capital is 400K, how is your largest max position possible only 4 contracts?

On 4 contracts, a $.25 move is $1,000.

Yes $1,000 / £400,000 is indeed about 0.2% depending on the FX rate.

a) Because I trade 37 other markets.
b) Because my volatility target is "only" 25% a year. I suspect yours is much, much higher.

GAT

 

[globalarbtrader]

I don't understand that calculation. If your capital is 400K, how is your largest max position possible only 4 contracts?

On 4 contracts, a $.25 move is $1,000.

... so normalising for the amount of risk capital I have purely in Crude, it's £50,240 or if you prefer $64,374. So a 0.25 move is 1.6%. Still not exactly heart stopping.

GAT

 

[Chubbly]

Am trading overnight crude.... was long from 47.70, crude was trading around 47.9... then all of a sudden i lose my connection to IB or about 60 seconds... when it's restored i see that on the 30sec bar chart there has been a dip of $0.25 while I was disconnected. the price had already recovered but had i been using stops i would have been stopped out. the scary part was the loss of connection to the IB server during the flash crash. WTF?????? no more crude futures for me HOLY SHIT...

$0.25 a flash crash???? What a noob.....

Do you even know what a normal monthly price range of crude is?
Anyways, thanks for adding liquidity!

 

[Max1]

It is interesting idea

 

[Max1]

Chubbly
The crowd is unable to move the price, because the shear force is transferred to other tools of petroleum products. The shift to 1pp is different, depends on the time of trade, on average, the price moves by 1pp from 3-million dollars, it's for oil, and in volatile time and 10 million is not enough to move the price, this is with the shoulder still 0.50. What I am saying is that you won't get extra liquidity

 

[tfp]

Crude experiences 30-50 mini 'flash crashes' each day. These are the breadcrumbs left by professional money taking profits , the stops of weak holders getting cleaned out, or often a nice combination of the two.

This morning, after a nice setup from London lows, we can see profits being taken by professional money after hitting volatility range extension targets. Drilling into a lower timeframe chart shows increasing sellilng pressure after targets fulfilled in a bearish setup from London highs (at least for NY open).

Mini flash crashes are the only way someone or something can unload 3000 cars in a clip...