Brief read of the FC report indicates 'tards programming a sell bot was the prime culprit. How many 'tards are out there as we speak?
*DJ Fear Of Canceled Trades Made Some Withdraw From Market During Flash Crash - Report . lol, no sh*t sherlock thats prob the reason why they had such a wide band of no bust trades, to reward those that didn't hide under the covers.
nah, he read this, crapped his drawers, and had to do an emergency wash. http://www.zerohedge.com/article/to...the+survival+rate+for+everyone+drops+to+zero)
read it and weep tj, I hear hot dog stands aren't a bad biz, and low barrier to entry. This âhot potatoâ volume is also very similar to what is known as âcircular tradingâ. Circular trading is rampant in India and their regulators have been grappling with it for years. Circular trades happen when a closely knit set of market participants, mainly brokers, buy and sell shares frequently among themselves to effect a security price. These trades do not represent a change in ownership of the security. They are simply being passed back and forth to create the illusion of price movement and volume. âHot potatoâ volume is not something that should be just overlooked as harmless since it is only HFTâs trading with each other. Their volume drives institutional decisions, albeit less so going forward, we hope. Most damaging though, is that hot potato volume lulls everyone into an illusion of healthy markets possessing liquidity, when in fact the markets have become shelled out and hollow.
A long paper on the subject: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1641387 Haven't read it but the conclusions seem logical.
I have suspected this happens alot. A hedge fund with say 100 sub accounts using multiple strategies could trade with each other. I have no faith that regulators could stop this and see these fraudulent trades. I remember one day trading bidu I saw multiple offers and bids for 20,000 shares getting taken out back and forth. The stock barely moved 3 cents but about 160,000 shares of activity printed. I have been trading as a tape reader for a long time and some of the things I see lately seem shady.