Why are there flash crashes in the stock market but no flash rallies?

Discussion in 'Trading' started by helpme_please, Mar 3, 2018.

  1. jinxu

    jinxu

    I remember him now. Hard to believe he made 218 threads during his time here!

    P.S. Does anyone remember this guy? I think he was a member here. I had his profile bookmarked but lost it. Kind of curious on what day he lost his money. Does anyone know?

     
    Last edited: Mar 8, 2018
    #51     Mar 8, 2018
    comagnum likes this.
  2. KevinD

    KevinD

    You guys are forgetting the "flash rallies" that ensued following 3 of Greenspan's intra-day rate cuts. I believe it started in mid October 2015 on a Thursday afternoon prior to an options expiration (another day that blew out many floor traders/mm's), then there was another one on maybe the second or third trading day of 2001, and another one thrown in there that I cannot remember. Those were very sharp rallies.
     
    #52     Mar 8, 2018
    comagnum likes this.
  3. Pekelo

    Pekelo

    Again, if price didn't come back quickly, it wasn't a flash rally. WTF is so hard to understand about that?
     
    #53     Mar 8, 2018
  4. KevinD

    KevinD

    Ah ok, my bad. Sorry to have disturbed you.
     
    #54     Mar 8, 2018
  5. Pekelo

    Pekelo

    Now here is an interesting piece on a flash rally:

    https://www.nytimes.com/2015/07/14/business/dealbook/treasury-flash-rally-report-is-released.html

    "The move, known as the Treasury “flash” rally, occurred on Oct. 15, and only lasted for about an hour. But the ferocity of the ascent — and the simultaneous eye-popping plunge in the yield — prompted widespread concern about the functioning of the market for Treasury securities, which helps set interest rates for borrowers throughout the economy."

    "But the five-agency group, which included the Federal Reserve Bank of New York, Wall Street’s closest regulator, avoided identifying any overwhelming single cause in the 70-page report, except to say that there were far more trades to buy Treasuries in those crucial minutes than trades to sell. "

    So they don't know or don't want to tell in 70 pages...
     
    #55     Mar 8, 2018
    tomorton likes this.
  6. JackRab

    JackRab

    That was when the Kerviel/Soc Gen trade backfired... ouch, 21 Jan 2008.

    http://www.highprobabilitytrade.com/2008/01/31k-goodbye.html
     
    #56     Mar 8, 2018
    jinxu likes this.
  7. Pekelo

    Pekelo

    Well, this 8:30 jobs report caused a rally, we shall see if it is flash or not. Huge gap at the open...
     
    #57     Mar 9, 2018
  8. Did you predict and trade and manage right -- and make a bundle today, Pekelo, o_O

    After a good day in the market...my mood feels like such elation...1994-1998 Wrestlemania theme song...my happy mood song,
     
    #58     Mar 9, 2018
  9. lukepoga

    lukepoga

    Interesting fact, Actually diamonds do spurt out of the ground randomly. They are forced up from deep in the mantle at random times in history and litter areas with diamonds! This is what happened in South Africa, and possibly other places not yet discovered around the world
     
    #59     Mar 10, 2018
  10. jlbishop

    jlbishop

    Downward moves can have more power because of resting stop orders to sell if price reaches the limit price. You typically don't see equivalent stop orders on the upside if price reaches a certain price. There are some - but the people doing so are usually hedging options positions.

    The net effect is that a large price shock can dry up liquidity after a move to the downside at the same time more orders come in to demand it - pushing price even lower.
     
    #60     Mar 11, 2018