NYSE says Electronic Trading Black Box for plunge

Discussion in 'Wall St. News' started by Trendytrader, May 6, 2010.

  1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aktCEVdfmfys&pos=1

    Electronic Trading to Blame for Plunge, NYSE’s Leibowitz Says
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    By Chris Nagi and Matt Miller

    May 6 (Bloomberg) -- Computerized trades sent to electronic networks turned an orderly stock market decline into a rout today, according to Larry Leibowitz, the chief operating officer of NYSE Euronext.

    While the first half of the Dow Jones Industrial Average’s 998.5-point plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television.

    “If you look at the charts you can see fairly clearly where the trades came in,” he said from New York. “It’s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split instant because there really was no liquidity in electronic markets.”

    The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop.
  2. Another reason to get rid of this black box, algorithmic, bullshit type of 'trading'. It turns the 'market' into a casino. This kind of garbage didn't happen in other countries/exchanges that don't suck up to these bogus leeches/ aka "liquidity providers".

  3. "While the first half of the Dow Jones Industrial Average’s 998.5-point plunge probably reflected normal trading"

    ROFL what a joke these exchanges are. Deep in the pockets of insititutional money. I guess I need an alert to tell me when markets are "fake" now.
  4. "Liquidity providers"...I hope they are looking into "abyss" like Greece...:mad:

  5. let em sell who gives a fuck. The markets will adjust. I wager you would see ALOT more GTC stink bids/offers in this market if they'd let it do its thing..
  6. Totally agree. But if your goddamn black box is too stupid to know when to stop fucking selling, then you should eat the loss. Why should their trades be busted? Why are good traders (and good black box makers, for that matter - the good ones know when to stop) have to subsidize the idiots?

    That's the part that pisses me off. Sure...this was an uncomfortable day (although, admit it - we all missed the excitement during the lull of the last year), but the market will adjust. Subsidizing morons pisses me off.
  7. they were profit-locking-in stop-loss orders that cascaded down. i guess you want to ban stop market orders too in your fantasy world. i'm fine with making the markets fair - (ie no sub-penny pricing, no queue jumping, no front-running orders, maybe even slow order placement down to hundredths of seconds rather) but saying no black boxes basically is like saying- let's get rid of all electronic trading, whether it is human or blackbox, because no one knows the difference between who submits orders like that.

    there won't be trading via any internet platform at all if you can't blackbox for this reason. think before you demand. you want your 3% per transaction broker fees reinstated?
  8. What really has me wondering is how many "naked" shorts hit the market today?
  9. exactly! no busted trades. Screw em.

    And by the way when is the last time you saw trades busted on the upside?? NEVER
  10. Since market makers are forced to provide you with a two sided market at all times, they have an exemption from locating. So, my guess is A LOT.

    Any idiot who was just shorting trying to manipulate stocks is now no longer with us. This "naked shorting" thing is the way the powers that be keep Joe average mollified. Shorts don't permanently drive down markets.
    #10     May 6, 2010