http://biz.yahoo.com/rf/031205/services_corinthian_announcement_1.html Reuters Nasdaq clarifies circumstances around Corinthian halt Friday December 5, 5:31 pm ET NEW YORK, Dec 5 (Reuters) - The Nasdaq Stock Market Inc. (OTC BB:NDAQ.OB - News) on Friday issued a statement clarifying the circumstances surrounding the trading activity of Corinthian Colleges Inc. (NasdaqNM:COCO - News), which plunged in early trading and was subsequently halted. ADVERTISEMENT Nasdaq said that during a 12-minute time frame starting at 10:46 a.m. Eastern time, Corinthian shares fell from $57.45 a share to as low as $38.97. Nasdaq said it determined that the extraordinary trading activity in Corinthian shares was caused by multiple orders being routed to multiple market centers and electronic communications networks by a single customer. Nasdaq said it halted trading in Corinthian shares from 10:58:08 a.m. Eastern time to 11:55 a.m. due to the extraordinary market activity, and Corinthian College was "in no way responsible" for the trading that took place. As it stated earlier in the day, Nasdaq said that all trades reported to Nasdaq in Corinthian Colleges executed between 10:46 and 10:58:08 would be cancelled.
I am trading without the news or that type of alerts and suppose I need to use it. I was wondering what some of you used to alert you to the COCO down volume. Thanks
Floyd Norris's take on COCO, found at http://www.nytimes.com/2003/12/06/business/06place.html -------------------------------------------------------------------------------- December 6, 2003 MARKET PLACE Computer Mishap Sends a Stock on a Wild Ride By FLOYD NORRIS A computer system gone amok combined with intensely competitive stock markets and indecision by Nasdaq officials to create wild trading in a single stock yesterday. As a result, some traders were left with big losses even though they had bought low and sold high. The dispute led to finger-pointing. Officials of some markets criticized the Archipelago electronic network for resuming trading in the stock before other markets did, and Archipelago faulted Nasdaq for not clearly explaining what was happening. The stock involved was Corinthian Colleges, a company based in Santa Ana, Calif., that operates colleges in several states. But the action in the stock had nothing to do with the company. The trading problem served to highlight the growing fragmentation of trading in Nasdaq stocks, with officials of competing markets relying on Nasdaq for regulatory decisions and trying to take business from it. The problem also showed how bad trades entered into one electronic terminal can quickly spread to all markets. In the end, many trades were canceled. But that decision was made after the stock had first been halted and then allowed to resume trading without any statement that the earlier trades might be canceled. One money manager, speaking on condition that he not be identified, said last night that his clients had bought 5,000 shares of the stock at $41.95 and then sold 2,500 shares at $52.99, while locking in profits on the other shares with a trade in options. When the earlier buy was canceled, the later trades left his clients having sold shares they thought they owned but did not. By then the price had risen further, forcing them to buy shares at high prices. "Instead of a gain, the clients are looking at a huge, huge loss," he said. "And they did nothing wrong." The problem appears to have begun with an order to sell that was entered into a system that Gr8Trade, a subsidiary of Instinet Group, leases to brokerage firms. The system allows a firm's customers to enter their orders directly into the system, and sends them to markets for execution. "There was some sort of system glitch," said Andrew Goldman, executive vice president of Instinet Group. "We are trying to figure out precisely what it was and who caused it. It appears that the result was an unintended effect on the stock in question." Other market officials said that the sell order apparently went into an electronic loop, endlessly repeating. Then automatic systems sprayed those orders throughout the market. The price plunged, falling from $57.50 at 10:46 a.m. to a low of $39.25 at 10:54 a.m. Mr. Goldman said that Gr8Trade officials noticed the trading and notified Nasdaq of a possible problem. A Nasdaq official, who declined to be quoted by name, said Nasdaq contacted the company and was told there was no news to explain the move. It halted trading at 10:58 a.m. Other markets also halted trading. The Archipelago electronic network allowed trading to resume at 11:19 a.m., before there had been any indication that trades might be canceled. The price of the stock gradually rose. Nasdaq officials said that before they resumed trading at 11:55 a.m., they sent out a notice to members saying that trades were being questioned. At 12:28 p.m., they announced the trades were canceled, and other markets did the same. Kevin Foley, the chief executive of Bloomberg Tradebook, an electronic exchange, criticized Archipelago for resuming trading early, and said he was disappointed that Nasdaq had resumed its own trading before announcing the cancellations. Margaret Nagle, an Archipelago spokeswoman, said that firm acted responsibly. "Our decision to reopen trading at 11:19 was based on the fact we learned from Nasdaq that this was not a regulatory halt and felt that the market was in a position to produce prices with integrity on this stock," she said. Regulatory halts are mandatory for all markets, and can be imposed to allow dissemination of news about a company. She said that when Archipelago allowed trading to resume, it did not know that trades might be canceled. Some exchange officials, speaking on condition of anonymity, said they had little sympathy for traders who bought stock at the low prices, and then lost money when they sold the stock before learning that the earlier trade was being canceled. "They should have known that was too good to be true," one said. Such losses would have been prevented if the markets had not resumed trading until a decision was made on which trades, if any, should be canceled. But with markets intensely competitive, trading resumed before officials had made their decisions. The losers were traders who were not responsible for the errors or the slow decision making. Copyright 2003 The New York Times Company | Home | Privacy Policy | Search | Corrections | Help | Back to Top