no, you're missing the point, halting the stock and busting the trades isn't a problem, it's busting the trades after reopening the stock for trading after the bust, they are supposed to anounce the bust of the trades before the reopen, last week they announced it well after trading resumed. basically everyone was under the impression the trades wouldn't be busted, then out of nowhere naz says they are going to bust the trades for the 12 min. time span.
nasd sued over COCO
- Thread starter Banjo
- Start date
no, you're missing the point, halting the stock and busting the trades isn't a problem, it's busting the trades after reopening the stock for trading after the bust, they are supposed to anounce the bust of the trades before the reopen, last week they announced it well after trading resumed. basically everyone was under the impression the trades wouldn't be busted, then out of nowhere naz says they are going to bust the trades for the 12 min. time span.
The CME has a clear policy which is in their rulebook to bust trades where ES deviates from the floor by more than 6 points in cases where cascading stops have been triggered by a large order (and no news to account for event) or in cases of technical failure.
Anyone who trades these spikes SHOULD be aware of the policy and should double up when the market moves back within the bust zone to make sure your are either going to be flat or on the right side of the market.
Additionally they tell you within a few minutes what is going to be busted.
The situations are not comparable.
Anyone who trades these spikes SHOULD be aware of the policy and should double up when the market moves back within the bust zone to make sure your are either going to be flat or on the right side of the market.
Additionally they tell you within a few minutes what is going to be busted.
The situations are not comparable.
If you halt a stock and want to bust trades, clearly the busts should occur *before* reopening. That's the basis of the lawsuit - that they announced after re-opening the stock and not before.
Personally I disagree with trade busts in any form, so yes I would criticise the CME, CBOT, Eurex etc. What should happen instead is that all the potentially busted trades should be viewed as done at a reasonable number of ticks below the pre-error low of the day (or an equal number of ticks above the HoD), OR the same number of ticks below the price at the time of the decision, whichever is better for those who did not make the trading error.
That way those who take the risk and go on the other side of a spike (which could easily be due to surprise news) to maintain liquidity and some semblance of orderly trading get rewarded, not punished. And those who make errors get punished, not rewarded. However they do not get punished so badly that the integrity of the clearing system gets threatened by a clerk making a keystroke error.
Personally I disagree with trade busts in any form, so yes I would criticise the CME, CBOT, Eurex etc. What should happen instead is that all the potentially busted trades should be viewed as done at a reasonable number of ticks below the pre-error low of the day (or an equal number of ticks above the HoD), OR the same number of ticks below the price at the time of the decision, whichever is better for those who did not make the trading error.
That way those who take the risk and go on the other side of a spike (which could easily be due to surprise news) to maintain liquidity and some semblance of orderly trading get rewarded, not punished. And those who make errors get punished, not rewarded. However they do not get punished so badly that the integrity of the clearing system gets threatened by a clerk making a keystroke error.
The only problem with ARCA is that they acted like Nasdaq lackeys when they broke trades for the same 12-minute time period. If you're going to be an independent exchange, then either don't break 'em at all or break 'em up to the re-opening of the stock.
Exactly. In their desire to punish ARCA/PSE for opening early, the Nasdaq officials completely blew it. They simply did not think it through, and if anything were completely clueless, as demonstrated by the NYT quote that traders should have known that those prices were too good to be true. I bought just before the halt at 42 (clicked sell button at 44 at the precise halt moment and trade did not go through). Believe me, when COCO was halted, nobody was doing cartwheels thinking this was too good to be true.
Why not go back and break the CECO trades too. If CECO didnt go down by the same amount two days ago..... then maybe you can say COCO was erroneous. But the reason those who sold thought it was true was because of CECO. Why wouldnt it happen here too, is what most traders thought.
What we should do is have everyone call up the NAZ and say you keyed in a 5000 share order in MSFT..... tell them you meant to key in a 500 share order, and you want the same protection as they gave the seller in COCO !!!!
Tell them it was a mistake and you want all the trades broken in that time frame. And then tell them that 5000 MSFT to me is equivalent to 1 million COCO to the other trader. If enough people do this, maybe they'll get the freakin point !!!!!!!
Banker