The Flash Freeze

nitro

nitro

First, the explanation because there appears to be confusion.

The NASDAQ halt was in theory to protect investors, not institutions that have direct connections. The NASDAQ has a mandate to allow for aggregators. Aggregators are what the rest of us that can't afford a direct feed get. Apparently, these aggregating connections are not redundant. As a result, a problem between ARCA and NASDAQ forced the NASDAQ to halt ALL trading at all exchanges. It is important to note that non of this affects institutions that have direct feeds since the glitch was with the aggregators not having redundant networks. So while trading could have continued at the other 11 exchanges, it was a regulatory rule forced the NAZ to halt everywhere.

So it is idiot rules that caused the problem.
 
Good post nitro.

I wasn't on line when it happened. Would IB's feed have frozen? I'm presuming that it would have but would prices somehow have
been moving elsewhere.
 
Quote from nitro:
----First....
----protect investors, not institutions....
----direct connections.
----direct feed....
----aggregating connections are not redundant.
----between ARCA and NASDAQ....
----halt ALL trading at all exchanges.
----It is important to note....
----not having redundant networks.
----other 11 exchanges....
----the problem.
More...
1) What if there had been a "domino effect" of other "connections" that failed as a result of being overloaded with data, innocently or deliberately, that potentially could have created another "Flash Crash"? :confused:
2) Speaking as a "futures junkie", the "fragmented nature" of the stock exchanges is a problem waiting to burn out of control like that. :( :eek: :D :cool:
 
Quote from nazzdack:

1) What if there had been a "domino effect" of other "connections" that failed as a result of being overloaded with data, innocently or deliberately, that potentially could have created another "Flash Crash"? :confused:
2) Speaking as a "futures junkie", the "fragmented nature" of the stock exchanges is a problem waiting to burn out of control like that. :( :eek: :D :cool:
More...
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Quote from nitro:

[4-0-1-0-0-1-2]
More...
1) Nazzdack likes to make multiple "bullet points", use a lot of "quotes" and finish postings with emoticons. :cool: :) :D :p :eek:
2) Nitro often has "voter polls" in his threads. :cool: :) :D :p :eek:
 
Quote from nazzdack:

1) Nazzdack likes to make multiple "bullet points", use a lot of "quotes" and finish postings with emoticons. :cool: :) :D :p :eek:
2) Nitro often has "voter polls" in his threads. :cool: :) :D :p :eek:
More...
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If they didn't halt all trading at all exchanges I don't think they could have resumed trading at all the other exchanges that day some were crippled by the sip outage.

arca had utp sip issues but they were still accepting orders and direct feeds were fine.

direct edge and bats exchanges were unable to process orders because they use the sip to verify their regnms requirements so they rejected all orders.

When the markets halted they all handled it differently. Bats and direct edge cancelled all orders and rejected new orders and 0x0 quotes on their books while arca and nasdaq allowed old orders to stay on the books but just halted trading creating some very funny prices like INTC jumping between $13 and $22 before the reopen. But this was probably just market makers going wide to protect themselves.

After they reopened trading ARCA had issues again quoting to the SIP and their direct feed prices crossed the market due to stale or zombie orders.

Darkpools were still crossing orders after the halts but later busted all trades after 12:23.

My fantasy stock market draft picks of who would been able to trade if all markets didn't halt but the sip stayed down.

ok: arca, amex, nasdaq, psx, bx
not: bzx, byx, edg-a, edg-x
maybe: cbsx, chx, nsx

nyse doesn't trade nasdaq listed stocks
 
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