How to flash crash/spike a stock?

Discussion in 'Trading' started by Sanaz3, Jun 3, 2010.

  1. Sanaz3


    We have heard enough about the recent flash crash of the market, but what about a particular stock? Does simply placing a big 'buy order' or 'sell order' at the market price cause it?
  2. 1) It would depend a little on what the day's trend of the stock/market is. To attempt to execute a "large" sell-order in a declining market would be more likely to cause a flash-crash.
    2) To attempt to execute a "large" buy-order in a rising market can feed the rally but probably more slowly. When the order is filled, the stock would become vulnerable to decline without continued buying after a substantial upside move. :cool:
  3. Is this because the velocity of Fear is three times that of Greed?
  4. ?....Hmmm,...yeah, provided that you're not trading a multi-leveraged, inverse ETF. :(
  5. You need level II quotes (how many shares are available to trade at each price level).

    Then you spot a moment of low liquidity, and IMO a limit order (to buy above the quoted market price, or to short below the quoted price), is more effective than a market order.
  6. make sure you have an escape route planned to a tropical country with no US extradition treaty.
  7. ?..... ! .... you're considering doing an "Airport Arbitrage" or "Rio de Janiero Spread"? :confused: :eek: :D