What happens is that some of the "clever" investment banks trade
off the NYSE so that they can avoid the circuit breakers that kick
in on a major down move. These are electronic trades, no human
involvement. What happened is that as the circuit breakers hit some
of these trades got shunted onto these alternate trading platforms
which had almost no volume hence the crazy prices.
comment from an insider:
Posted by isplat on 6th of May 2010 at 04:33 pm
What happens is that some of the "clever" investment banks trade off the NYSE so that they can avoid the circuit breakers that kick in on a major down move. These are electronic trades, no human involvement. What happened is that as the circuit breakers hit some of these trades got shunted onto these alternate trading platforms which had almost no volume hence the crazy prices.
This will not end well
SEN TED KAUFMAN: HIGH FREQUENCY
Posted by isplat on 6th of May 2010 at 05:11 pm
SEN TED KAUFMAN: HIGH FREQUENCY TRADING APPEARS TO HAVE PLAYED A ROLE IN STOCK MARKET GYRATIONS TODAY
SEN TED KAUFMAN: "POTENTIAL FOR GIANT HIGH-SPEED COMPUTERS TO GENERATE FALSE TRADES, CREATE MARKET CHAOS REARED ITS HEAD AGAIN TODAY"
SEN TED KAUFMAN: BATTLE OF ALGORITHMS IS NOT UNDERSTOOD BY SEC, NOR IS IT TRANSPARENT TO SEC
SEN TED KAUFMAN: ALGO TRADING MUST BE CAREFULLY REVIEWED AND PLACED WITHIN MEANINGFUL REGULATORY FRAMEWORK SOON
NYSE EURONEXT CEO SAYS MANY TRADES OF PLUNGING STOCKS DURING AFTERNOON SELL-OFF DID NOT OCCUR ON THE NYSE