why should market makers put a bid on short sellers or naked short sellers and from traders. they have uptick rule for a reason,,the market illiquid and anyone cashing out takes liquidity out of the market. with no uptick bid rule...all the bids are easily taken out leaving no bid. there is such thing as no bid and no ask..that is afterhours. and no volume these HF are just computerized daytraders. they offer no value to the market. and are responsbile for like 70% of intra-daily volume. of course these firms can cause whiplash trading like today.
Fragmentation of the exchanges is the real problem here. Why should I provide "LIQUIDITY" to black pools and SigmaX ? No way as long as "price discovery" happens in "dark places"...
I would like to think that INITIAL MARGIN REQUIREMENT WOULD KICK IN AND SYSTEM WOULD REFUSE THE TRADE.
Probably the HFT/Stat arb guys ran out of BP. I know I did. What a great 15 min that was. Anyone who has a sell stop market on an off exchange was a dumbass, good thing nasdaq saved you.
I don't buy that. If a price is based on liquidity, rather than fundamentals, and if both are removed, then maybe you get your .02 bids.
<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/u7nwUdDMPpI&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/u7nwUdDMPpI&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object> This guy had a pretty interesting foresight on this subject matter almost a year ago. At the end of the clip he predicts a day like yesterday with HFT as the main cause is bound to happen. "It didn't print; it just disappeared. How's that a liquidity, Mr. High Frequency Trader?"