NYSE Breaks Trades of S&P 500 ETF Showing 9.6% Plunge

Discussion in 'Wall St. News' started by ASusilovic, Oct 19, 2010.

  1. Oct. 18 (Bloomberg) -- A software update at NYSE Euronext’s Arca platform triggered what appeared to be a 9.6 percent plunge in an exchange-traded fund that tracks the Standard & Poor’s 500 Index, a drop that would have erased $7.9 billion from one of the most popular securities in the U.S.

    Data published by the electronic venue at 4:15 p.m. New York time showed the SPDR S&P 500 ETF Trust at $106.46 compared with its opening price of $117.74. The apparent plunge in price involved 7.2 million shares in the closing auction on NYSE Arca, according to data compiled by Bloomberg at 4:30 p.m. The S&P 500 rose 0.7 percent to close at 1,184.71 today.

    The glitch in the exchange-traded fund, which has a market value of $83.3 billion, comes as federal regulators are trying to restore confidence to equity markets following the May 6 crash that erased $862 billion of share value in 20 minutes. Data showing the decline appeared just as Apple Inc. and International Business Machines Corp. were releasing quarterly profit statements.

    “It was a mess and it was alarming that it could happen,” said Andrew Ross, a partner and global equity trader for First New York Securities LLC, who trades ETFs. “People were very focused on after-market trading because of IBM and Apple earnings so it was very confusing when the price discrepancy happened. But people quickly recognized it was a bad print.”

    Auction Glitch

    NYSE Arca said the ETF’s official closing price will be recorded as $118.28, a 0.5 percent gain from its Oct. 15 close. The exchange operator said its 4 p.m. closing auction in securities listed on NYSE Arca was delayed for 15 minutes because of an issue with a software release. Auction prices occurring at 4:15 p.m. will be the official closing price for all other securities except for the SPDR S&P 500 ETF.

    NYSE Arca will “bust” all the $106.46 trades, according to an e-mail from exchange spokesman Raymond Pellecchia. The fund managed by State Street Global Advisors is one of the most heavily traded securities in the U.S., averaging 223 million shares a day this year, data compiled by Bloomberg show.

    “The issue has been resolved,” Pellecchia said in an interview. “Operations will be normal tomorrow.” Marie McGehee, a spokeswoman for State Street Corp., declined to comment.

    Trading in another security linked to the S&P 500, the E- Mini futures contract traded on the Chicago Mercantile Exchange, helped start the May 6 crash that briefly sent the Dow Jones Industrial Average down 998.5 points, according to regulators. A mutual fund company’s automated sale of the contract without regard to price and “hot potato” trading by computer-driven firms set off the rout, according to the Securities and Exchange Commission and Commodity Future Trading Commission report.


    The US markets are a farce, a complete joke. And funny enough nobody on ET complaining about canceled trades ? :confused: :mad: :mad:
  2. A/H bad print? What's new? :)
  3. It`s not the time for being sarcastic...
  4. very few retail traders would have been involved in that print.
  5. someone tested real support in the market that level 2 does not show. thats the only way to find out.

    not much there to see, no better than flash crash :eek:

    print more dollars :D

  6. or... get ready for 10% plunge as there is real support.
  7. Nice. That should bring money back to the markets.
  8. Yeah, first directive in the morning :

    memo to our trading desk - no SPY investments until NYSE/Arca and State Street have explained this disaster...or shall I say "breach of trust" ?
  9. expect more of the same until the big one hits.

    i predict a major index will melt down or melt up by a

    significant percentage within a year.

    only then will regulators act.

    if one thing has been learnt from the original flash crash is the ability

    of everyone to sweep everything under the carpet, deny there is a

    problem and stick their fucking heads in the sand and just prey it

    wont happen again.

    the frequency of these mini flash crashes is staggering.
  10. Maybe they think that if you put enough under it, it will become a flying-carpet ^^
    #10     Oct 19, 2010