NASDAQ's disgraceful act involving FB IPO

tenthousandmen · May 22, 2012

Why would the hft people do something so stupid? They know they are going to blow it for themselves!

Unless if the losing hft people are doing this to crash the industry as revenge.......

syswizard · May 22, 2012

Quote from Alcibiades:

That is a facade . It had nothing to do with
CANCEL / CANCEL - REPLACE orders , they
just didn't want to hurt little Zuck's ego by
announcing they couldn't decide what to
do with all the SELL orders . Underwriter
did some job heh? Pricing IPO lower would
have solved all this , but I am sure there was
something tied to market cap that prompted
the $38 price .

You indicating that Nasdaq "faked" the whole software problem ? Hard to believe. Once again, just like BATS, the software should have gone into into contingency mode when order flow is one-sided.

Rodney King · May 22, 2012

Quote from nesyo03:

Being an individual trader, you weren't forced to trade this stock

Exactly. Those who plan to hold long-term now have an opportunity to improve their average prices. Either FB will go up many-fold like GOOG or it won't, but in either case no one 5- 10 years from now will remember its first few days' trading... Neither the underwriters nor NASDAQ owe wannabe-flippers a living...

sttrader · May 22, 2012

http://www.ritholtz.com/blog/2012/0...ampaign=Feed:+TheBigPicture+(The+Big+Picture)

syswizard · May 22, 2012

The irony here is that Nasdaq has also been among the exchanges leading the charge to try to damp down excessive cancellations, in cases when there are more than 100 quotes per actual trade executed. In the case of cancellations, it is tradersâ software â their algorithms that make trading decisions â that is in question; whether poor design makes them wasteful with their trading messages.

Well here was an opportunity for the Nasdaq to use this new matching engine, specifically developed for IPO's, and they just blew it off. They could have imposed this cancellation limit within their software easily. 100 quotes ? I would have made it 10 at most.

Shear stupidity at play here by an entity that has obviously has monopoly control. Are heads going to roll ?

Alcibiades · May 22, 2012

Quote from syswizard:

You indicating that Nasdaq "faked" the whole software problem ? Hard to believe. Once again, just like BATS, the software should have gone into into contingency mode when order flow is one-sided.

no sir , I feel they had a software
problem , just NOT for cancels and
cancel replace ...... it was because
they had toooo many SELL orders
and are stroking little Zuckerman's
ego ..... why would anyone plunk
money down on a company run by
a 28 year old without ANY experience
running a million dollar company , much
less a multi billion dollar company ...
not to mention the fact he went and
got married just in time to give bride
1/2 his worth ./....MAYBE she is the
brains behind him ....

Bison42 · May 22, 2012

You can buy all the FB you want today!! Cancel,replace,sink or swim. Doesn't matter. This is a Fad. Unsustainable.

syswizard · May 22, 2012

Quote from Alcibiades:

no sir , I feel they had a software
problem , just NOT for cancels and
cancel replace ...... it was because
they had toooo many SELL orders

When that occurs, the software just starts slow the flow of orders that's all as it drops the ASK price in a very controlled and methodical way. It does not match orders without sending the fill confirmations (that is what happened). It keeps all cancellations LOWEST Priority....and ignores them when the per-trader limit is reached.

Heck, I could have written this software better than the monkeys who obviously didn't account for this one scenario. It's actually two scenarios....the same thing would have occurred had FB gone to 100.

Don Bright · May 22, 2012

Quote from forsalenyc:

I'm sure I'm not the only trader who got a late fill on FB IPO at 1:50 est. I know shit happens from time to time in trading, but what NASDAQ did today was disgusting. I said 'disgraceful' in the title, but I'll take that back since there's no grace in trading to begin with. Nasdaq probably had this problem resolved much earlier than 1:50est, but faced a dilemma of distributing shares at $42 when FB was trading in the $38's.... What a cheap ass move to avoid lawsuit. And the fact that FB immediately tanked following distribution makes you wonder if they got involved in bringing the price back up near the opening print. Dirty Dirty Dirty......that's all I gotta say.

On the flip side, after waiting for 90 minutes or more, we had traders who had paid about $42.50 - and then later tried to cancel (with no reports back on either, the order or the cancel) - were given outs when the stock was back down to $38.00.

Gotta win sometimes, LOL.

Don

forsalenyc · May 22, 2012

Quote from Don Bright:

On the flip side, after waiting for 90 minutes or more, we had traders who had paid about $42.50 - and then later tried to cancel (with no reports back on either, the order or the cancel) - were given outs when the stock was back down to $38.00.

Gotta win sometimes, LOL.

Don

That's what I heard.....traders who bought above $42 were forgiven. Not all, but some. Irony if you want to call it.........to reverse the executions at $42 would means Billions of $$$$