I've been robbed

Yes. This guy was definitely robbed. The HFT programs messed up and smashed the market to ridiculous levels, the OP was smart and lucky enough to purchase the bargains which these programs had created.

But guess what, the institutions cry foul and want their stock back because it was a mistake. No human being would have sold their PWV at $0.20.

The institutions must understand that this is the price they pay for having programs make all their trading decisions. However, since the SEC is in the pocket of these institutions, they proceed to rob "Peter" to pay "Paul." The little guy suffers again.

 

This is ridiculous. They should cancel the round transactions, both BUY and SELL to have it flat so NO profit and NO loss.

 

The OP is a tool. Period. It's not as if Thursday was some, once in a lifetime, bust fest. Happens ALL THE TIME.

Even pre-electronic it happened frequently. When I was in the pit it wasn't at all rare that the market would explode, 18 bid, 19 bid, 20 bid, 24 bid, 27 bid...then a broker on a 28 stop says, "I'll buy a hundred" and the market breaks straight down to 15. What would then happen? A broker who'd been holding an unable sell limit at 27 would scream, "who traded 28's!?? I was 27 offer the whole time!! Pull the 28 high!! 27 is the high!" So boom-if 27 is the high, then the 28 stop MUST be unable, and my 100 sales at 28 are bye-bye. I can remember the aftermath of fast markets when I'd hold positions for a half hour or more, unsure if the print would stand. If it's too good to be true, it's usually not true.....

 

That was understandable, in the days of pre-electronic trading. I would even understand if this happened in the days of the specialist and market makers.

However, with HFT now being the primary market makers and almost 70% of the volume coming from these "so-called" liquidity providers, I support the OP. We now have super computers and there should be no problems at all.

This has me worried because what happens when a crash happens and we all stand by the sidelines and buy these great bargain stocks only to be told the next day that it was a fake crash and that we have to give our profits back.

We now have to differentiate between real and fake crashes.

 

The market was down 9-10% at it's worst levels. The OP bought a $17 stock for 20 cents. That's an 99% discount.

That stock move was a 'fake crash'. That's the clearest example or an erroneous trade you'll ever find.

As the old saying goes "Watch out when you're getting all you want. Fattening hogs ain't in luck."

 

Just another reason to trade futures.

CME has got their act together.
Clearly defined circuit breakers, Valid Trading Price Zones, No Bust Range and a Clearing Mechanism that is obligated to honor deals.
Their market orders are with protection from crazy fills.

Obviously many make their fortunes trading equities but anyone take a close look at the leveraged ETF's as the reason for flash crashes?

These Leveraged ETF's are tracking +/- 300% of their basket and if a component drops in price they would be obligated to amplify the effect.

I'm curious if any of their "institutional" sized trades were busted. After a certain range of market movement their computers are unloading 50K lots into the market.

 

Its good that you know how to look words up. Next look up the meaning of "hedge."

 

Seems like the big boys figured out a way to drive stock price up.

Step 1) Sell at ridiculously low price
Step 2) Wait for the counter party to realize their profit
Step 3) Cancel the trade and leave the counter party with a short position
Step 4) Squeeze and profit!

Bye bye market integrity! Bye bye liquidity!


PA

 

So apparently there doesn't have to be a real "glitch" of somesort - just a dramatic change in price for busts to happen?

 

A 99% discount is definitely too much of a good deal and I understand your point.

An error like this in the old days of the specialist, may not have cost the OP that much because I dont see how a specialist would have moved the stock down to $0.20.

Maybe OP buys it down 10%-30%, gets busted and is out reasonably less money at the worst. He can live to trade again. I just think we are getting the worst of it with these programs. Heads we win, Tails you lose.