Tag Archives: Chicago Board Options Exchange

US Stock Markets Infected By Malicious Software?

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.”

CBOE spokeswoman


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…

Im spite the fact that it’s only been a week since the last flash crash occurred in the US stock markets.

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.

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Tyler Durden at Zero Hedge comments:

“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:

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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?”

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By the way, this is what the heavyweights in the financial news business reports:

Bloomberg: U.S. Stocks Drop as Financial Shares Slump, Technology Rallies

CNN: Stocks end mixed after choppy day

CNBC: Stocks Fail To Hold Gains; Technology Rises

The Wall Street Journal: Gold at New Peak; Dow Slips

?

Related by the Econotwist:

SEC Expand Single Stock Circuit Breakers for Russell 1000 Index And Others

May 6. 2010: “The Black Thursday”

Testimony Of A High Frequency Trader

Thursday May 6. – Busiest Day Ever On CBOE

Wall Street Collapse: Did Somebody See It Coming?

David Rosenberg: “The Weirdest 20 Minutes Of My Life”

U.S. Stock Crash Compels Further Investigation of Wall Street Scam

The Rise Of The New Market Makers

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Filed under International Econnomic Politics, National Economic Politics

US Stock Markets Infected By Malicious Software?

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.”

CBOE spokeswoman


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…

Im spite the fact that it’s only been a week since the last flash crash occurred in the US stock markets.

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.

Tyler Durden at Zero Hedge comments:

“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:

Bloomberg: U.S. Stocks Drop as Financial Shares Slump, Technology Rallies

CNN: Stocks end mixed after choppy day

CNBC: Stocks Fail To Hold Gains; Technology Rises

The Wall Street Journal: Gold at New Peak; Dow Slips

?

Related by the Swapper:

SEC Expand Single Stock Circuit Breakers for Russell 1000 Index And Others

May 6. 2010: “The Black Thursday”

Testimony Of A High Frequency Trader

Thursday May 6. – Busiest Day Ever On CBOE

Wall Street Collapse: Did Somebody See It Coming?

David Rosenberg: “The Weirdest 20 Minutes Of My Life”

U.S. Stock Crash Compels Further Investigation of Wall Street Scam

The Rise Of The New Market Makers

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Wall Street: "Explosive"

More big moves in the forex market are sending new waves through the stock- and commodity markets. The dollar is taking another dive, pushing stocks and most commodities higher. No one makes long term investments in this market. Option traders at Chicago Board of Options Exchange are expecting price swings between 20% and 30% before the end of the month.

 

“An outside fundamental news story will decide which way prices move. Until then, investors should be wary as the market pinches into an area that would be explosive.”

George Kupp

(Article in Norwegian)

explosion1

Nye store bevegelser i valutamarkedet skaper nye bølger i aksje- og råvaremarkedet. Etter torsdagens hopp i dollarkursen, stuper den amerikanske valutaen igjen. Ingen tør investere langsiktig. Opsjonstraderne på derivatbørsen venter “eksplosive” prissvingninger.

Etter et kraftig comeback tosdag, fortsetter dollaren like kraftig ned igjen fredag.

Markedet følger etter i vanlig fasong. Det vil si; råvarer og aksjekurser stiger.

Men fredag er det faktisk ett untak – oljeprisen.

Oljeoverskudd

Oljeprisen fortsetter ned. Vanligvis pleier den også å følge dollarkursen.

Dette forklares med gårsdagens lagertall fra USA som viser et market, og mer enn forventet, økning i de amerikanske olje- og bensinlagrene.

“There’s a battle in the oil markets between bearish fundamentals and expectations on when the economy turnaround will come,” sier analytiker Gene McGillian hos Tradition Energy til CNBC.

Oljemarkedet ser ut til å være det eneste markedet som har litt kontakt med fundamentet i øyeblikket.

Alt annet er offer for den algoritmiske handelen.

Dagens viktigste makrotall, The Reuters/University of Michigan index of consumer sentiment, viser et fall fra 70,6 til 66,0 fra oktober til november.

Analytikernes estimater lå rundt 72 poeng.

Det er også lagt frem nye tall for den amerikanske handelsbalansen som viser den største økningen i underskuddet på 10 år.

Men det stopper ikke Dow Jones indeksen fra å skyte opp 2,5 prosent.

Kun kort sikt

I dette markedet er det ingen som tar sjansen på noen langsiktige investeringer. Til det er usikkerheten for stor.

– Hvis du skal inn i markedet nå må du være kjapp i vendingen, og forberedt på å dumpe aksjene hurtig hvis det dukker opp svakheter, sier porteføljeforvalter Russ Koesterich Barclays Global Investors til The Wall Street Journal.

“We may not have a lot of short-term impediments, but if you look at the longer haul, you have serious headwinds, starting with the employment picture.”

CNBCs faste kommentator – Art Cashin – advarer mot store svingninger neste uke, forsterket av at det er utløpsdato for flere viktige cross-border valutaopsjoner.

Se intervjuet med Art Cashin her.

 


Eksplosivt

Bortsett fra olje, stiger de andre råvarene synkront med dollarkursen.

De store svingningene, som for eksempel torsdag, gjør at prisene svinger utenfor de tekniske trendlinjene, noe som igjen kan føre til kraftige motreaksjoner.

Senioranalytiker George Kupp hos LaSalles Futures Group i Chicago viser til opsjonshandelen med sukkerkontrakter og sier til Bloomberg News at prisene kan komme til å gjøre bevegelser på mellom 20 og 30 prosent innen november er omme.

“An outside fundamental news story will decide which way prices move. Until then, investors should be wary as the market pinches into an area that would be explosive.”

For en grundigere analyse av siste uke på Wall Street kan vi by på en liten delikatesse.

Her er en rykende fersk analyse fra selveste Goldman Sachs.

 


Carry-Trade ikke bæredyktig

Når valutaen driver aksjemarkedet, hva er det da som driver valutamarkedet? spør Bloomberg Television, og Bloombergs egen analytiker Sara Elsen forklarer i denne videoen hvordan tingene henger sammen.

Ifølge Sara Elsen er det en betydelig sjanse for at korrelasjonen mellom valuta- og aksjemarkedet kan bryte sammen i løpet av de neste månedene.

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