Quote from OldTrader:
I have to say that the above statement bothered me.
First, let me say that I'm one of those who lost money Thursday. I'm pissed off about it.
Here's a few things that piss me off, in no particular order:
1. I noticed the system was not operating correctly. I incorrectly assumed that it was IB, and would be back up in their normal 5-15 minutes. But let's be clear about something....by the time anyone notified me regarding this outage, it was too late. But I note that the "pit" had already been notified ahead of the public, as usual, and was beginning to act on that knowledge, as usual. In other words, the playing field was not even, and the pit acted on the knowledge.
2. I don't know what fairy tale you've been reading about the 'floor'. Recent news events talking about the 'front running' going on on the NYSE. This has been going on in the futures market for years. The "Merc doesn't intentionally screw anyone"? LOL. Where you been man? They'd screw their own grandmother if there was a tick in it. Please!
3. "If you lost you're a lousy trader". You know, last time I looked, the main thing he does is buy low, sell high. And in connection with that, I will say that I've been trading for over 30 years. I can tell you that the market did not bottom in a normal fashion. And once the Globex news hit, the market turned almost on a dime and never looked back. I don't attribute that to a 'conspiracy', but the Globex outage became a technical factor which literally turned the market in a way it would not normally turn. It created buyers for futures contracts who knew there would be public buyers artificially later on. None of this has anything to do with 'trading' per se...it has to do with how quickly you got the knowledge about the outage.
4. Yes, a short ES could have been hedged. Let's say 500 shared of SPY could have been bought, margin cost of about $23K per contract hedged. If you think that every guy trading the ES has an extra $23K sitting in the account in addition to the overnight margin for a contract (each contract had to be carried), think again.
Admittedly, an easy hedging mechanism would have been the Dow contract on the ACE system, which was still functioning. Frankly, that didn't occur to me, the Dow future is so far off my horizon. Besides, keep in mind, at first various times were thrown out about when it would be back up....so depending on the reason for your position to begin with, you might not have wanted to put the hedge on for that brief period of time.
It only became clear later that Globex was not going to reopen. And by that time a good portion of the rally Thursday was already in the bag.
I closed the position Friday at a loss. It wasn't a big loss particularly, but keep in mind it was only a trade for me (not a scalp), a trade I had a profit of about 15 points from a short Wednesday, when Globex went down. This was a trade that I would have made money on in a normal course of events, except for that type of event. And further, as I've already said, I think the event changed the dynamics of the market at that time. We'll never know that for sure now though.
I think there were undoubtedly any number of small traders who were hurt by this event, and really didn't have a way to deal with the problem. I think that's too bad. If you're a truly a 'lousy trader', then you'll lose money in the end because you won't buy low sell high. But to lose money this particular way is not a function of 'trading'. I think if Globex was operating a system the way it begins to sound, these characters should have their ass kicked.
And you sir, unfortunately exhibit a lack of human compassion to call people idiots and/or lousy traders because they were hurt by malfunctioning technology. I took the time to read some of your prior posts, and noticed that this isn't the first time you've resorted to calling others idiots. This method of communication on your part really says a great deal about you....none of it favorable.
OldTrader
