What really happened with BATS execution?

Discussion in 'Order Execution' started by Quickless, Mar 26, 2012.

  1. We have some super sharp traders on ET. Would appreciate some more detail on what happened with BATS on Friday.

    I look at it as market orders on the bid side and some big time problems on the ask side. There also had to be some kind of matching algo at work that when there was not a bid - ask match it adjusted the price.

    Details from pros welcomed.

    Anyone think that BATS was set up?
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  4. If this is how Nanex shows, and I think it is. What where the motives to do that?. I mean, people want make money not halting stocks :/.

    Maybe there is some connection between this and the lately antiHFT activity around. Anyway, if this is the case, thanks to the guys that performed this "hack". One more reason to review HFT practices and limit them :D
  5. http://www.zerohedge.com/news/skynet-wars-how-nasdaq-algo-destroyed-bats
  6. Thanks.

    Let the antiHFT wars begins. :D

    Looks that BATS knew that something like this was possible and let it happen to reveal to the crowds what´s happening there, and get some support during the next IPO.
    Far better decision than letting their bots fight against the others.
    Anyway, as I said before, this will attract more public attention to the HFT problem.
  7. re: "that article"....What a huge load of B.S.

    1) The Waddell and Reed Flash Crash occurred at the CME because the stupid people there didn't have a limit on the number of contracts PER ENTITY. It was specified per TRADER. Had the proper order limit been PROGRAMMED (it's the software !!!), the orders would have been cancelled....and the flash crash would never have occurred.
    In that case, they had good software, but people had established the "rules"....and the rules were faulty.

    2) In the case of BATS, they thought they had sophisticated software, but they DID NOT. There was no circuit breaker logic.
    Once again, the software was operational, but it was "dumb". The designers were at fault here. Also, where was the testing ? The testers were at fault as well. Finally this says nothing good about the BATS management team given the fact that EVERYONE in the industry is keenly aware of the power of the algos today. This was just a release of beta software, that's all....similar to Windows Vista. Microsoft was able to recover from that debacle, but can BATS survive after this one ?
  8. I want to thank everyone who replied to this post.

    The link to the Nanex Report blew me away. Can't say I understood everything going on in that report but the amount of detail was certainly impressive.

    I had no idea so much was going on in the background.
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    syswizard, what (if any) is the ISO role in these cases?
    #10     Mar 31, 2012