And you know what's really funny about this whole debate, looking back at that video by Jim Cramer... A widely believe reason for the May 6th "flash crash" was the improper execution of a large S&P futures order by BarCap. This was not a crash generated by computer algos... in fact, its quite the opposite. Rather than using an algo to break up the order, and thus minimizing the impact on the market and average execution price, some idiot hit the "sweep" button instead (which hits every bid until the order is completely executed).
can agree with that. And I never intended to outlaw people who engage in whatever fair business practices they like. If someone is good at collecting rebates then I am the last one being jealous. I thought it was apparent from my very first post here that I target those guys who actually control a combined 50-70% HFT volume and who engage in questionable business practices.
that is utter crap. It was HFT, look at all the fx crosses, look at all the stocks, look at european index futures, look at all the US indexes. This was an industry wide sweep where every last computer that was still linked to the game executed sell orders because sell levels were triggered.
I was thinking it was a coupling between extremely thin liquidity due to volatility, mixed in with a lot of stops being executed, margin calls, and band wagon shorts hopping on for the ride (who eventually got burned).