The once great American Stock Market are behaving more and more like an old Compaq Presario, still operating on a windows 98 platform and heavily infected by malicious software. It keeps flashing and crashing, and seems to become more and more unstable every day. The new single stock circuit breakers are almost meaningless, as they only reboot the system – over and over again.
“The CBOE Stock Exchange is looking into the issue.”
The trade, which appears to have taken place on a stock platform owned by CBOE Holdings Inc . (CBOE), set off a single-stock “circuit breaker” as exchanges this week expand the trading halts to all stocks in the Russell 1000 index, alongside some exchange-traded funds, Dow Jones news wire reports.
Strangely, very few other news media does…
And the fact that nobody have managed to figure out what really happened on May 6th when we had the first big one that later triggered a cascade of investigations and the recent implementation of single stock circuit breakers.
Today‘s hiccup appears to have originated at the Chicago Board Options Exchange:
“The trade, which appears to have taken place on a stock platform owned by CBOE Holdings Inc . (CBOE), set off a single-stock “circuit breaker” as exchanges this week expand the trading halts to all stocks in the Russell 1000 index, alongside some exchange-traded funds,” Dow Jones news wire writes.
“A spokeswoman for CBOE said Tuesday that the trades that triggered the circuit breaker were canceled. The CBOE Stock Exchange, the market where the trade took place, was looking into the issue, she said.”
Big Boys With Big Toys?
However, amongst the common traders, there’s little doubt about what’s going on.
“It has been about a week since we have had a flash crash in our broken markets, and we were getting a little antsy. Then Nucor showed up and traded at $0.01. At 11:52:21 something broke, and as the QR chart below shows, it was basically precisely the same algo malfunction that either goes and hits all bids all the way to zero, or some HFT decided to shut down, and wipe out the entire bid-side order book. The stock which had been trading at $39.58 literally milliseconds earlier, saw a SkyNet T-1 unit go berserk and take out the bids at $37.22, and $35.77 in sequential fashion, with the next trade being at at the residual stub quote of $0.01. Of course, circuit breakers were triggered, but not before even more irreversible damage to investor confidence was suffered. And those idiots ‘upstairs’ still wonder why tomorrow we will report another massive outflow from mutual funds.”
And here’s some charts to visualize:
Zero Hedge: “There is a pattern emerging: every week we are seeing a flash crash in more and more prominent stocks. These are getting more and more frequent. And instead of fixing the underlying cause, the SEC continues to fret with reactive damage control, and DKing trades of those who are brave enough to step in and take advantage of broken algos. How long will this kind of bullshit travesty continue?”
By the way, this is what the heavyweights in the financial news business reports:
The Wall Street Journal: Gold at New Peak; Dow Slips
Related by the Econotwist:
- Mini Flash Crash in Nucor Shares (observer.com)
- Nucor Sees 3Q Earnings Down From 2nd Quarter (nytimes.com)
- Stock ‘circuit breakers’ could avoid flash crash (cbc.ca)