GBP USD

[i960]

Hideous move, here's the futures atleast:

 

[Piptaker]

And here's more commentary from around the place on why GBP was crushed
Fri 7 Oct 2016 04:03:47 GMT
Author: Eamonn Sheridan | Category: News

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These via the WSJ round-up
(bolding mine)

• "I initially doubted what I saw on my screen," said Kenji Yoshii, a foreign exchange strategist at Mizuho Securities
• Traders and strategists said the initial catalyst for the pound's drop came from remarks by French President François Hollande ... His comments came early in the Asian session, where light trading volumes likely exacerbated the move, they added
• "There was a complete lack of two way interest in buying the pound on the way down," said Jeffrey Halley, a senior market strategist at Oanda.
• Chris Weston, chief market strategist at IG, a broker. "This is the sort of time when the big U.S. traders are going home and Asian traders are getting back to the desk"

The most likely cause of the pound's sudden drop on Friday was a so-called 'fat finger' trade-that is, an error by a trader-or a rogue algorithm, said Bart Wakabayashi, managing director and head of Hong Kong foreign exchange sales at State Street Global Markets.
"When you have that big a move you're triggering a lot of things on the way down, like stop losses and options barriers, which exacerbate the whole move"

 

[ajcrshr]

Waddell and Reed putting on hedges in Sterling too?

 

[i960]

The infamous "fat finger" which these days typically means "completely calculated, coordinated, and strategically timed finger."

 

[Turveyd]

I was watching, missed my short entry just before, just managed to resist a long, switched the ipad off, that would of been my last trade for a while.

Too close, can't risk that, despite really liking the GU motion, pulling all GBP pairs from my watch list

P.s. Thanks would of totally missed that as M1 trader and numbers all get ignored.

 

[globalarbtrader]

https://www.linkedin.com/pulse/flas...bert-carver?trk=hp-feed-article-title-publish

I was short a couple of GBP contracts, overall up about 3% since yesterdays close. So not a spectacular day but better than the other way round.

GAT

 

[mlawson71]

I am so glad I had no open positions. Even if I had short ones, the spread was 500 pips and more, there was no way I could've come out ahead.
Is there any consensus what happened and why it happened?! What's a "fat finger"?

 

[birzos]

That depends if the NFP comes out negative.

 

[Low Salubrity Thug]

The infamous "fat finger" which these days typically means "completely calculated, coordinated, and strategically timed finger."

The bullshit babble in the media makes me both chuckle and shake my head in equal measure.

The timing of the move, during a period of exceptionally low liquidity between US and Asian hours, is telling though.

https://www.linkedin.com/pulse/flas...bert-carver?trk=hp-feed-article-title-publish

I was short a couple of GBP contracts, overall up about 3% since yesterdays close. So not a spectacular day but better than the other way round.

GAT

Hats off to you, an overnight gain of 3% is not to be sniffed at.

Your take on things is spot on. I would replace the word 'pundits' with something much stronger though. The link at the bottom is particularly funny. Rings very true with me. this morning I'd love to be a fly on the wall in my old building.

 

[lukas]

That was nasty. I see a 1.18606 low. Someone got stopped out.

Surely, some stop orders have been triggered, although hard to say due to lack of OTC market volume data (4k contracts in futures) but the timing of this move (usually the lowest volume of the day at this time) makes me think with almost 100% certainty it was not an error as suggested by the media but some big guys doing their thing.
For the record - risks of electronic trading in one picture: