Has anyone else heard about this, I was half listening to a programme on the radio the other day and it sounds like a disaster waiting to happen.
Where is Doom Prawn when you need him?
Where is Doom Prawn when you need him?
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There was an article about it in the FT at the weekend (or friday I think it might have been) might be worth checking out.Originally posted by Boudica View Post
Algorithmic trading has been around for ages though. What the SEC et al are interested in is the possibility of deliberate market manipulation caused by overloading the exchange IT systems causing a temporary increase in latency of information transmission to other market participants creating arbitrage opportunities, and / or similar effects occurring as a result of badly written software.While you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'Comment
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Flash Crash - never seen anything like it
Not my fault. None of my punters, nor I do that HFT trading. Some algo scalping, yes, but not this stupid stuff.
It's making a mockery of the market and must be stopped.How did this happen? Who's to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you're looking for the guilty, you need only look into a mirror.
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This happened recently on an AIM traded stock Rockhopper Exploration (RKH) which happens to be one of the current Falklands Oil Exploration firms. Most suspect naughty goings on as AIM seem easier to manipulate. See here:
Contrarian Inverstor UK Blog
"Today Rockhopper Exploration(RKH) inexplicably suffered its own "flash crash". After trading at around the £2.70 mark for much of the day it suddenly began to fall at around 12 noon, falling through the £1.00 barrier and moving into the 60's at its low. The company was forced to issue a news release at 13.52 stating "notes the significant share price movement today. Rockhopper is not aware of any reason for this movement but makes the following update...". Like the DOW flash crash the reasons do not seem to be clear. Some have speculated that this was a market maker induced "tree shake" to flush out sellers and fill orders for large institutions. However, the scale and speed of the falls not only in Rockhopper but also in Desire Petroleum (DES) and Falkland Oil and Gas (FOGL) makes this appear unlikely. It is possible that a "fat finger trade" occurred of sufficient size or more likely a relatively large institutional sell order (a 125,000 sell occurred around 12) which may have destabilised the market in the shares and triggered a cascade of sell orders as automatic stop losses were triggered electronically. As many private investors hold the stock it is plausible they were using automatic stop loss orders which added to the selling panic. Like the DOW "flash crash" a sudden loss of liquidity moved the stock to unbelievably low levels before buyers returned and moved it back to a more normal trading pattern. False rumours of problems relating to the quality of the oil find also seem to have been circulating in the City which added to the downward pressure."
For the record Rockhopper are currently trading at approximately 315p.Comment
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