* * * *
"Muscles" Anderson is dragging out his Haiti report. Ltc. Lakin will probably get 4 mins.
Posted on 05/07/2010 6:02:41 PM PDT by Nachum
Federal investigators probing the “flash crash” that briefly sliced nearly 1,000 points off the Dow Thursday are zeroing in on a series of “unusually high-volume” trades in S&P futures that originated in Chicago, a government official told POLITICO.
Those trades set off a chain reaction of trades that caused the biggest drop within a single day in the Dow Jones Industrial Average’s storied history.
(Excerpt) Read more at politico.com ...
wow imagine that
Maybe the folks running the VIX wanted to see a little more action. They certainly got it.
I want them Dem party to have a “flash crash”
Chicago, imagine that.
Hmmm is right...where is Soros usually?
Nothing good ever comes out of Chicago -— man, beast or deed
Another revision to Glenn Beck’s blackboard is in order. I don’t need to read this article.. “Chicago” tells me everything I need to know.
“Chicago” is code word for “Time for the Obammy Administration to cover-up what REALLY happened.”
I think someone shorted some stocks and decided to make it a profitable position.
Chicago?
What happen to the markets back in Sept 2008 also happened through Chicago. CBOE, CME where credit swaps go through. The names and ownership have changed but a lot goes through their plus the carbon exchange for CO2.
Could this be a test so that certain hedge fund managers would find out exactly what would happen when the market does crash so they can capitalize on it?
Look for the real thing about a month before the November election. Why not...it worked in 2008.
Some big high frequency trading firms are in Chicago. Undoubtedly 0bama donors??
_
_
But “algo-trading”, and the rise of so-called “high-frequency” traders that often use it, is so pervasive that some suspect it may be hard to see how ordinary investors can be expected to trust market structures in which they have placed their faith for decades. Instead, they seem to serve the interests of short-term traders using the latest computer wizardry.
More than half the US equity markets involve the use of a form of algorithmic or high-frequency trading. That is a huge increase since the 1987 stock market crash, where programme trades were blamed for exacerbating falls.
Moreover, trading takes place not only on the main exchanges - the New York Stock Exchange and Nasdaq - but on a plethora of other platforms, including “dark pools” and systems operated by brokers themselves. Less than 35 per cent of trading in NYSE-listed shares actually takes place on the New York Stock Exchange these days.
The speed of trades is mind-boggling. Last month Algo Technologies, a US company, unveiled a system that can handle a trade in 16 microseconds.
Stock exchanges are courting “algo” traders, eager to attract business away from rival platforms.
For most ordinary investors the idea of an exchange is still the neo-classical facade of the mighty NYSE on Wall Street. But in reality, most shares change hands in vast data centres. One of them, the size of three football fields, opened for business this week in Basildon, UK, built by NYSE Euronext, owner of the New York exchange.
I sense some possible protectionism.
OFCOURSE CHICAGO would have SOMETHING to do with this. Think we will ever know WHO is behind this?
oops, projectionism
Would that not work AGAINST Obama?.. or would it be spun as further vilifying “those evil right wing Wall Streeters”. Even in that scenario, it would still work against Obama due to his failed Wall Street reform which would’ve taken effect by then. One can only hope. LOL
bfl
Mmm. MMM. MMMMM.
There, it's corrected.
I can’t imagine Obama knowing much about the market so someone is feeding him for him to even suggest sabotage.
“Feds trace flash crash to Chicago”
ChicagoWay ping!
FWIW ...
Comment at politico link:
???
May 7, 2010all
Obama Attack On Corporate Giant P&G Shatters US Stock Market
By: Sorcha Faal, and as reported to her Western Subscribers
An interesting report prepared for Prime Minister Putin by Deputy Minister Tatyana Nesterenko of Russia’s Finance Ministry states that US President Barack Obama yesterday ‘personally ordered’ an attack on America’s fourth largest corporation Proctor & Gamble (P&G) over fears this Global consumer products giant has aligned itself with American Military ‘elements’ set to ‘forcefully oppose’ the ‘socialization’ of their country.
According to this report, this Obama launched attack against Proctor & Gamble originated from the banking giant Citigroup he had previously taken over using $300 Billion of American taxpayer money, and which yesterday initiated a P&G stock trade that not only cut this corporate giants worth in half, it nearly collapsed the entire US stock market in the process.
American propaganda news reports are stating that this disastrous Cititgroup stock trade was ‘mistakenly’ done when one of their traders entered ‘billion’ instead of ‘million’ while processing a sell order for P&G stock, which was immediately noticed by financial news analysts reporting on what has now become the US stock markets biggest intraday point drop in history.
Important to note, this report continues, was that at the same time Obama was attacking P&G’s stock value, he was also assaulting them through the use of his governments Consumer Product Safety Commission, which hours before the attack on P&G’s stock value announced they were launching a probe of the World’s largest household products company over claims it Pampers diapers were harming children, a claim P&G quickly fired back was “completely false”.
[Note: It bears mentioning that at the same time Obama was attacking P&G, his own government scientists are attacking him. According to the New York Times, the President’s Cancer Panel (called the Mount Everest of the US medical mainstream) yesterday released a devastating “landmark” report warning that “to a disturbing extent, babies are born ‘pre-polluted” due to the number of unregulated and untested chemicals being poured into their bodies. (continued)
http://www.whatdoesitmean.c...
Hmmmpf!!! Well .. well... well, and there’s
a few financial firms closely connected to
-0 .. Ariel Investments, for one.
‘Course, Soros could’ve just given the word
or a diabolical hacker:
~~~~~~~~~~~~~~~~~~~~~~~~~
*****ALERT:
LTC LAKIN IS COMING UP WITH ANDERSON COOPER —
CNN AC360!!!!! He just announced the upcoming
segment descriptions, and Lakin’s was stated.
Well .. Anderson’s been well coached in disinformation.
In so many words, his description of Lakin’s stand
is that he doesn’t believe -0 is a NATIVE born
American citizen.
Typical ...
Prayers for LTC Lakin.
Can we find out who made lots of money because of the “little glitch”.....? Follow the money.... Whose campaign coffer did it go into?
Got three TVs on it...GIve him a big boost and maybe more stations will cover for the ratings.
Ask the people on the other end of the trades.
I burnt the fish tonight. My house smells awful. I can’t deal with this...lol.
* * * *
"Muscles" Anderson is dragging out his Haiti report. Ltc. Lakin will probably get 4 mins.
hmmmm ....
May 7 — Warren Buffett’s Berkshire Hathaway Inc. had a smaller shareholding of Procter & Gamble Co. at the end of March than three months earlier, a company filing showed.
The market value of Berkshire’s investment in the world’s largest consumer-products company fell to $4.73 billion on March 31 from $5.04 billion at the end of December, Buffett’s firm said today in its quarterly report. Cincinnati-based P&G rose 4.4 percent on the New York Stock Exchange in the first quarter.
The investment’s cost basis, a measure of how much was paid to accumulate a stake, declined to $4.46 billion from $4.96 billion, Omaha, Nebraska-based Berkshire said. The cost basis for American Express Co., Coca-Cola Co. and Wells Fargo & Co., the other three top holdings listed in Berkshire’s filing, were unchanged in the quarter.
Ltc Lakin ON NOW ..
now AC said “natural born citizen”
Showing the GREEN BC and mentioning
the 2 newspaper announcements.
AC’s getting very ticked off at the
the lawyer .. Lakin hasn’t answered
yet.
Woooo .. AC’s getting really tough.
AC’s panties are in a leftist wad ...
Sissy Cooper spewed the same lying talking points and was always talking over Lakin and Jenson. Sissy: Obama release his birth certificate to the public. Absolute BS.
Totally .. weren’t you tho skeered by hith fury?
LOL ..
It’s SO windy here that we could open the front and back doors and all the dust would be gone in ten minutes.....Other contents of house might blow away too....
My babies won’t leave my side. I’ve got to get up at five, but the wind is singing too loud to sleep.
“Sorcha Fall” is a known pseudonym for a nutcase hoaxer.
Yes, setting stops is a stupid way to "protect" the investment position. They will be taken out in cascade fashion.
Unfortunately, one of the first things that all these expensive "free" "investment schools" and "investment seminars" teach the people who have no idea about market, is that they can "protect" their position with "tight stops". That's one of the best ways to guarantee the steady loss of money; sometimes fast enough to learn and stop doing it, but often slow enough to steadily lose most of it.
High-Speed Trading Glitch Costs Investors Billions - CNBC / NYT, 2010 May 07, by Jackie Calmes and Binyamin Appelbaum
In recent years, what is known as high-frequency trading — rapid automated buying and selling — has taken off and now accounts for 50 to 75 percent of daily trading volume. At the same time, new electronic exchanges have taken over much of the volume that used to be handled by the New York Stock Exchange. In fact, more than 60 percent of trading in stocks listed on the New York Stock Exchange takes place on separate computerized exchanges. ..... The Securities and Exchange Commission and the Commodity Futures Trading Commission said they were examining the cause of the unusual trading activity. ..... One official said they identified “a huge, anomalous, unexplained surge in selling, it looks like in Chicago,” about 2:45 p.m. The source remained unknown, but that jolt apparently set off trading based on computer algorithms, which in turn rippled across indexes and spiraled out of control. Many firms have computers that are programmed to automatically place buy or sell orders based on a variety of things that happen in the markets. Some of the simplest triggers are set off when a stock drops or rises a certain percent in the trading day, or when an index moves a specific amount. ..... Some circuit breakers do exist, a legacy of the reforms made following the 1987 stock market crash, but they only kick in after a huge drop — and only at certain hours. Before 2 p.m., a 10 percent drop in the Dow causes New York Stock Exchange to halt trading for one hour. Between 2 p.m. and 2:30 p.m., the pause shrinks to a half-hour and after 2:30, there is no halt in trading. ..... “We have a market that responds in milliseconds, but the humans monitoring respond in minutes, and unfortunately billions of dollars of damage can occur in the meantime,” said James Angel, a professor of finance at the McDonough School of Business at Georgetown University.
Why the Trades Were Clearly Erroneous - CNBC, 2010 May 07, by Bob Pisani
How did this happen? We don't know if the sudden drop was caused by an erroneous trade, or by a technology malfunction, or if the stock traded away from the NYSE and there were simply no bids. What we do know is that similar events happened quickly with other stocks. In the most egregious example, Accenture went from $40 to $0.01 in a couple minutes. There were other examples as well. Again, how could this happen? In one sense, it doesn't matter what caused the drop. These were clearly erroneous trades. Any common sense definition of "erroneous" would tell you that when a stock goes from $40 to $0.01 something is wrong. After the close, NYSE Arca and Nasdaq said it canceled all trades executed 60 percent away from the market from 2:40pm to 3:00pm, which would include many trades in Accenture. What's wrong? Trading today -- stocks, bond, or commodities -- it's a combination of technology and judgment. Clearly there was a little too much technology here and not enough judgment. Where is the duty of care to clients from a broker when a stock goes from $40 to $0.01? At least the NYSE designated market makers saw something was happening and acted on it. Unfortunately, the way the rules are everyone can ignore them. Reg NMS says all markets must route orders to the best price, and if your market is not automatically accessible, or slows down, people can trade through you with complete impunity. That's what happened. ..... All stocks at the NYSE have circuit breakers here called LRPs -- when stocks trade rapidly outside of certain parameters, the designated market makers can slow trading for short periods to allow bids to catch up, something NYSE Chief Duncan Niederauer said earlier on Closing Bell. .....
Chicago markets caught in domino effect - Chicago Tribune, 2010 May 06, by Greg Burns
Rather, so many orders were flowing into the all-electronic exchange that its market-making "book" was "exhausted down to the final quote at a penny," noted David Harris, chief executive of the stock exchange. Under regulations common to all U.S. securities exchanges, trades occurring at those erroneous prices either are canceled or adjusted to a reasonable price, Harris said. Regulators consider sorting those outlying trades afterward a better approach than trying to stop them before they happen. Meantime, CME Group sought to squelch a rumor that a bank trading system ran amok in its e-mini stock-index futures contracts. In an unusual statement issued Thursday evening, the Chicago-based company said that stock-index trading by Citigroup Global Markets Inc. "does not appear to be irregular or unusual in light of market activity today." ..... Accenture, Chicago-based utility company Exelon Corp. and Philip Morris International Inc. were among 27 U.S. stocks with at least $50 million in market value that dropped more than 90 percent as U.S. equities tumbled, before recovering by the close. ..... Exelon plummeted to a hundredth of a penny during trading before closing down 4.2 percent, at $41.86. Philip Morris of New York, the world's largest publicly traded tobacco company, sank 96 percent, to $2, before ending at $47, a drop of 3.5 percent. ..... One of the wildest 20 minutes in Wall Street history spilled into Chicago's major markets Thursday, prompting one exchange to declare a series of trades "clearly erroneous," and another to suggest that a hot rumor was wrong. .....
Computers, Not Human Error, Likely Caused Market Meltdown - CNBC, 2010 May 07, by Jeff Cox
These experts think the intensely accelerated electronic trading was sparked by the Greek debt crisis and other events and not a trader who typed a "b" for billion instead of "m" for million in executing a trade on Thursday. Friday's market volatility seemed only to confirm that investors are afraid of what lies ahead and are wary of the stock market. "It wasn't a fat finger," said Dave Lutz, managing director of trading at Stifel Nicolaus in Baltimore. "The markets became unglued...Most of it was centered on the fact that currency markets affected the equity markets." Not everyone is so sure. Authorities are probing the trading activity and looking to see whether a human mistake or manipulation was at play. ..... "We believe the electronification of markets and the fragmentation of liquidity — stocks trading simultaneously on many exchanges and alternative execution venues — has enhanced the risk of catastrophic meltdowns of excessive volatility," the firm wrote. "We believe instances like yesterday's 1,000 intra-day point sell-off could become much more common if changes are not implemented." ..... "A lot of these (electronic trading) models become very sensitive when volatility is high," said Aaron Gurwitz, managing director and head of global investment strategy at Barclays Wealth in New York. "It's possible that a lot of these models got to a point where they got strong reduce-risk signals, that things are not working right." "In that context," he continued, "even a small glitch, a slightly overweight finger rather than a fat finger, could have triggered a lot of the things that happened... A lot of very substantial traders become very sensitive. There's not that much difference among these models. We've seen this can be a source of potential systemic risk that really does need to be investigated." ..... Computerized sell programs triggered by global events—rather than trader error or a "fat finger"—appear to have caused Thursday's unprecedented market swing, according to market pros who are reconstructing the nearly 1,000-point stock selloff.
How High-Frequency Trading Works - CNBC, 2010 May 07, by Barbara Stcherbatcheff
Supporters of high-frequency systems claim to add essential liquidity. But some critics claim that HFTs have increased the amount of volatility and instability in the markets. ..... There was initial speculation of human error. Now there is a focus on computerized trading. ..... High-Frequency Trading systems (HFTs) are computerized trading programs that make money two ways. They place bids to make small amounts of money from liquidity rebates provided by the exchanges, or they make tiny per-share profits. While this is only dealing with fractions of cents per transaction, HFTs together execute trades on billions of shares a day, rendering it extremely profitable.
Trading System May Have Dangerous Flaw - CNBC, 2010 May 07, by Bob Pisani
The argument that computers are not in control of the markets, that they are merely programmed by traders, does not hold a lot of water when a stock goes from $40 to $0.01 in a matter of seconds, as happened with Accenture. In other words, there may be a flaw at the heart of the trading system, which is now routinely seeing 6 billion share trading days due to high frequency trading. Yesterday, the NYSE consolidated tape saw 10.7 billion shares changing hands. ..... ..... Fat fingered trade? Computer glitch? It's possible that one of these was the cause of yesterday's drop, but as traders stream into Wall Street, the worry is that this could have happened without a computer glitch or fat fingered trade. ..... That's what happened; once liquidity was removed from the NYSE floor, even for 90 seconds, trading went to markets where there were obviously thin or nonexistent bids. .....
The Blame Game: NYSE vs. Nasdaq - CNBC, 2010 May 07
"We provided continuous market support for that period of time. The stocks over the NYSE did not enjoy that luxury," Greifeld said. The NYSE "basically walked away from the stock." Well-known investor Jim Rogers piled on: "Somebody should hang this New York Stock Exchange!" Rogers said. "They claim to be the center of the world's capitalism, of the world's financial markets, you would think that in 2010 they could sort out simple things like electronics." ..... ..... "Our systems function flawlessly," said Nasdaq CEO Bob Greifeld, citing the fact that Nasdaq-listed stocks Microsoft, Intel and Cisco had modest drops, while NYSE stocks like P&G and Accenture fell off the rails.
This high frequency trading is done in the “dark” exchanges and the above board exchanges. I’ll guess the computer glitch started in the dark exchanges and infected the normal ones. Might have been a cyber attack in the dark pool exchanges which are more rowdy and less security than the above board exchanges
Nasdaq has bragged for years that it is more hi tech than the stodgy ol NYSE who that bald headed stooge Richard Grasso milked for a 140 million payout. Saw that puke on TV today
It was more hi tech since inception, so as they say, it ain't bragging if they done it.
Anyway, whether it was a mistake or a test, or an actual cyber attack, it's good that it happened at this slow but "nervous" time, after several days of selloff on Greece / Portugal / Spain, terrorism, oil spill and Obama "reforms" news. System got exercised pretty well and, I'd say, without too much disruption because it was so quick and not too far from the market close time.
More so than stocks, options will take some time to sort out, so volatility and volume should be somewhat heightened before starting to come down.
Funny puppy-— Trailing stops are what is better?
There is no fundamental difference between them, only calculation method. Stops have the problem with both volatility (overshooting down the price) and liquidity as it’s “walked down” on inadequate number of shares bid.
Either is susceptible to and is often taken out on a thin (lower) bid volume, especially if they are or get exposed to the trading system level.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.