Something strange happened all in about 15 minutes. It looks like possibly one or more market maker firms didn’t do their jobs properly and withdrew their bids completely in some stocks while other firms dropped their bids down way low, which caused some trades to execute at extremely low prices for a few minutes. That knocked the DJIA down by 800 or more points (approximately) for a few minutes. This needs to be investigated by the SEC for sure. I’m not sure what happened, but one possibility is a breakdown in the functioning of market maker firms.
>>a breakdown in the functioning of market maker firms.
And another huge scam netted billions for the perps of this “glitch”.
Yup, call me cynical, but I just think we saw some people get rich enough to buy their own countries.
The action was not the result of any particular news item, but rather a breakdown of technical levels and a wave of broad-based selling.
The whipsaw trade has caused a surge in volatility, such that the Volatility Index is currently up more than 60%. DJ30 -518.29 NASDAQ -103.09 SP500 -50.09 NASDAQ Adv/Vol/Dec 436/3.36 bln/2331 NYSE Adv/Vol/Dec 142/1.62 bln/3021
http://finance.yahoo.com/marketupdate/overview?u
A trading forum said that Fidelity couldn’t process trades during the dive due to overload.
It could just be that so many people were executing trades that the calculations fell behind real time. This sort of thing happens when panic sets in.