NASDAQ Trading Halted Due To "Technical Issue" 240
barlevg writes "The Wall Street Journal reports that trading was halted midday Thursday due to an as-yet unnamed technical issue. Says SEC spokesperson John Nester, 'We are monitoring the situation and in are close contact with the exchanges.'"
Hello tech support? (Score:5, Funny)
Re:Hello tech support? (Score:4, Funny)
"3 times... You always tell me to do it 3 times."
- The Website Is Down (http://youtu.be/uRGljemfwUE)
Re:Hello tech support? (Score:5, Funny)
You have to restart it while holding down the option key. That will flush the cash.
Re: (Score:3)
Re:Hello tech support? (Score:5, Funny)
Re: (Score:2)
Have you tried turning it off and on again?
That's useless. Fifty years ago the got us to the Moon, and look where they are now!
Re: (Score:2)
Well, NASDAQ is set to be turned on again soon, but only the first and last stocks alphabetically (AAIT and ZVZZT) will trade for 25 minutes before re-opening for all.
What kind of crazy bug are they fighting here?
Re: (Score:2)
Re: (Score:2)
I find the bit about Windows Vista even funnier.
MUAHAHAHAHA (Score:4, Funny)
Does this make anyone else happy for some reason?
It's Apple's fault (Score:2, Funny)
Their stock has been slipping, and right when it dipped below 500 per share, NASDAQ shits the bed.
Coincidence? I think... yeah, probably, actually.
Re: (Score:2)
A flash crash was what I thought.
Since these insane investors want core algorithmic changes made that could ruin the whole economy done in a matter of hours it would not surprise me if protections in the trading systems shuts them down equally in a blink of an eye so that particular investment wont lose money and cause a 2nd great depression in the process.
Re: (Score:2)
Since these insane investors want core algorithmic changes made that could ruin the whole economy done in a matter of hours
It's just the stock market, a drop in the market isn't going to ruin the economy. 1929 looked bad, but the economic problems happened first, then the stock market dropped. Look at black Monday (1987) for an example of what happens with flash trading crashes......not much.
Re:It's Apple's fault (Score:5, Interesting)
Since these insane investors want core algorithmic changes made that could ruin the whole economy done in a matter of hours
It's just the stock market, a drop in the market isn't going to ruin the economy. 1929 looked bad, but the economic problems happened first, then the stock market dropped. Look at black Monday (1987) for an example of what happens with flash trading crashes......not much.
You are aware that something insane like 1/7th of the worlds money is on these systems right? Not 1929 at all.
Theoretical logic error where a less than instead of a less than or equal too is in one of these HTC systems.
Lets say this is a big one with trillions and trillions to use like Bank of America and Goldman Sachs. I dated a woman who used to work for BOA and she told me the books have 40 trillion in assets that are processed nightly on their computers. The US GDP is only $14 trillion for the record on how big of anumber this is. Mainly inflated home values spiked this as they assets were really liabilities when the housing market crashed.
Now lets say in 1/10000th of a second it shorted 15 companies stocks by accident by only 10%. Now the Goldman Sachs computer sees this and it has $15 trillion to play with. What will it do? If it is quick and short it will quickly repurchase them and sell them also at 1/10000th of a second. But it sees this on 5 other fortune 500 companies. It sells fast. Now the slower trading firms computers see this in Chicago and the 2nd tier financial systems see these 2 systems quickly selling fast as now 12 companies are affected.
What do they do Sell to keep what is has and so and so on. A full 2 seconds pass and what happens? The world's weath is gone your 401k is history, the treasury is insolvent as bonds crashed, banks are insolvent, as they always owe more than they have in assets which all their debts are traded with each as assets collecting interest.
Seems laughable just 10 years ago but this great recession and what is happening recently shows otherwise. Money is just generated out of thin air by debts and used to buy stocks which fund your 401ks and investments.
What would happen today is a totally collapse of civilation as businesses rely on computers and debt to function if you have taken any finance course. I do not mean this as an insult or to imply anything by the way as I have taken college level finance and it was shocking how answering using your profits to fund your expenses is the wrong answer. To obtain credit and hold onto your cash to raise your shareprice is always the right answer and even small business today with no shareholders relies on IOUs to stay in business unlike in 1929.
With no money 98% of all businesses would close. This is why the bailout happened in 2009 despite very angry resentment from voters.
So it is not inconcievable that a flash crash can wipe out a lot. This is why the Glass-Seagul act was written to prevent banks from being vulnerable with a crash which is now sadly appealed.
Re: (Score:3)
I only read the first few lines of that because it became immediately clear that you know nothing about any of it.
1. The exchanges will ONLY match at the NBBO. Therefore you can only short at the national best offer.
2. A large aggressive sell will cause a decline in the market... hence you actually have to keep selling at lower prices.
3. After a reasonably short drop in price, a mandatory halt goes into effect... see circuit breakers. This is built into exchange matching engines to prevent flash crashes.
Eve
Re: (Score:3)
Schadenfreude.
I'm not even sure what the stock market *does*. I don't think many people do. Including the people who run it. The higher echelons of finance are so many layers of abstraction away from what the common people deal with, it's hard to fit the two ends together.
Re:MUAHAHAHAHA (Score:5, Insightful)
I'm not even sure what the stock market *does*. I don't think many people do. Including the people who run it. The higher echelons of finance are so many layers of abstraction away from what the common people deal with, it's hard to fit the two ends together.
This isn't about some mysterious "higher echelons of finance ". The majority of Americans own stock, directly or though 401k or pension plans. Before the 2008 crash is was nearly 2/3s. And yet many people are in the same boat as you.
I think this is a terrible problem with education in America. People are afraid of the market, don't understand it, don't want to understand it, but that's due to simple lack of education. And it's important to know the basics, since it will likely affect your standard of living in retirement.
Just like there's a certain minimum amount you need to know about how cars work before you can drive safely - not all that much, but there are a several hours about it in most drivers ed classes - there's a certain minimum amount you need to know about how markets and investments work. Where's the public education for that? Are we so intent on class warfare that we'll cut off our nose to spite our face here?
Re: (Score:3, Insightful)
I'm not even sure what the stock market *does*. I don't think many people do. Including the people who run it. The higher echelons of finance are so many layers of abstraction away from what the common people deal with, it's hard to fit the two ends together.
This isn't about some mysterious "higher echelons of finance ". The majority of Americans own stock, directly or though 401k or pension plans. Before the 2008 crash is was nearly 2/3s. And yet many people are in the same boat as you.
I think this is a terrible problem with education in America. People are afraid of the market, don't understand it, don't want to understand it, but that's due to simple lack of education. And it's important to know the basics, since it will likely affect your standard of living in retirement.
Just like there's a certain minimum amount you need to know about how cars work before you can drive safely - not all that much, but there are a several hours about it in most drivers ed classes - there's a certain minimum amount you need to know about how markets and investments work. Where's the public education for that? Are we so intent on class warfare that we'll cut off our nose to spite our face here?
Yeah, that was before people discovered. Now everyone is doing it and these companies can not grow anymore and no more investors will come in to boost the shareprice.
Shit most do not even pay dividends anymore! That is a terrible buy if you ask me. That is like me selling you a vacation home where I keep all the rent money and you get nothing. Would you agree to such a deal even after you buy it?! Hell no. ... but don't worry Johhny down the street just may buy it so you can still get rich ... wink wink.
Now
Re: (Score:2)
Re: (Score:2)
And it's important to know the basics,
The basics: Buy low, sell high
Re:MUAHAHAHAHA (Score:5, Funny)
When I sell high, I always get the munchies.
Re:MUAHAHAHAHA (Score:5, Insightful)
"I think this is a terrible problem with education in America. People are afraid of the market, don't understand it, don't want to understand it, but that's due to simple lack of education. And it's important to know the basics, since it will likely affect your standard of living in retirement."
I agree, but I can also see the other side of it. Way back before technology made it possible to do day trading or HFT, it was actually a market that most educated people could get their heads around. And if you're a Buffett-style "value investor" who picks good companies and hangs onto stocks for a long time, a lot of the noise is still filtered out. But, I do think that online trading, instant access to information and cheap trades contribute to volatility. Volatility filters back to the average investor in the form of their account balance wildly swinging up and down for reasons that aren't 100% clear to them.
Some examples:
Investment buy decision process, old school: "Hmm, the WSJ basically reprinted an IBM press release showing new and exciting products. I think I will buy 100 shares of the company and see where it goes. I will call my broker in the morning and pay $100 in fees, then I will own and hold these shares to see if they increase in value."
Investment buy decision process, new school: "OMG, my trading platform's tech sector chart just blinked a brighter shade of green, looks like IBM is in play. Click, buy 100 shares IBM, 85 shares CSCO, 62 shares MSFT, 90 shares RHAT all for $7.95 or free if I trade hundreds of times a month."
Investment sell decision process, old school: "Hmm. the WSJ article I just read says IBM isn't keeping up with competitors. I've made a bit of money on this over the last 10 years, time to sell. Let's call the broker in the morning and maybe I'll do some research on where else to put the profits."
Investment sell decision process, new school: "OMG, IBM missed their quarterly earnings by one cent. Wow, they suck. Sell sell sell! Twitter, "OMG, #IBM is #toast, get out now!!!!!' Stock message boards, "Smart money is in Cisco." Facebook: "Selling my IBM shares now, suggest you do the same." Wow, IBM is down 25% for the day, I wonder why?
If I were running a company that didn't need access to capital that only the stock market would bring, I'd never go public even if it meant Easy Street for me forever. Once a company does that, they will NEVER have control over anything they do.
Re: (Score:3)
Volatility filters back to the average investor in the form of their account balance wildly swinging up and down for reasons that aren't 100% clear to them.
It has ever been thus. If anything, volatility is quite constrained now by historical standards. Markets have always been driven first by rumor and fashion, and only distantly by fundamentals. It was worse in 1913, and worse still in 1713.
What's changed is that now most of us have a reason to care, and should have been taught stuff like this.
Re: (Score:3)
And the reason why we have a reason to care is because our pensions all got turned into 401(k) plans.
Shocking that pumping a bunch of money into the stock market causes stocks to go up. Never woulda guessed.
Pension plans were also invested in the stock market. What, you think they work by magic? OK, they probably have a bit higher percentage of bond investment than the typical guy chooses for his 401k, but I doubt is that big of a factor in the scheme of things.
If most Americans learned enough to make basic, sensible investment decisions about their 401k (the sort of stuff any financial advisor will tell you), plus the basics about how the market works mechanically, I think America would be in a far better p
Re: (Score:2)
Another good point. But here's another (IMHO) good point. :-)
Pension funds are invested for the incredibly long term. A brand-new employee's contributions have 30-40 years to grow in some cases. That's a lot of time to fix screw-ups and smooth out any volatility. The pensioner may not maximize their returns the same way they would if they had invested on their own, but they are guaranteed a payout at the end. Due to lack of education, I've heard of a lot of retirees who lost huge chunks of their nest egg ar
Re: (Score:2)
agree that people need financial education, but I do think that the stock market is not something that Average Joe should be forced to put their money in if they want to be something other than broke when they retire.
A few hours of education would fix that. The stock market is exactly where you want your money for any sort of multi-decade long term, but you need the training to ignore the news.
I don't mean to sound elitist or snobby, but most people just don't have the capability to understand this stuff. If they did, no one would carry a balance on a credit card, take out a payday loan, or bounce a check.
More missing basic education. Most people who aren't very bright get by just fine with the rules they learned growing up - the "tribal knowledge" of our culture. We seriously need to make an effort here to establish this tribal knowledge about money. No deep abstract thinking is required here in any way.
Re: (Score:2)
Again, if you want to save money for retirement, either directly or by proxy, it has to go somewhere. The middle class is swiftly becoming the "owners". Time to learn how that works. Hint: not like you obviously think it does.
Re:MUAHAHAHAHA (Score:5, Insightful)
I think this is a terrible problem with education in America. People are afraid of the market, don't understand it, don't want to understand it, but that's due to simple lack of education.
It's not due to lack of education, but due to the simple fact that the stock market really is scary, and that's exacerbated by the fact that people have less faith in our basic financial institutions than they used to.
The stock market is scary because it can swing up and down wildly. The only sound advice for most people (myself included) is that over the long term (decades) it almost always has a better yield than other investments. Buy some low cost index stocks and hang on to them. If you think you can do better than that, you better make sure it's not just vanity, or a few lucky outcomes feeding your confirmation bias. Very few people can beat the market with pick and choose. Timing? Even Warren Buffett avoids that. He's a long term value investor, but really doing that well takes serious research (that's what he and Charlie do all day).
It doesn't help that people have lost faith in our basic financial institutions either. I don't think that rationally applies as much to the stock market. HFT raises a lot of eyebrows (likely for good reason) but for any long term investment its effect is very small. Banks (investment and depository), insurance companies, etc. are another story. There is no secret that major banks and insurance companies got bailed out by the Treasury, and even more, the Federal Reserve. The capitalists, who preach free markets and rugged individualism, got saved by nanny government. To add insult to injury, they were largely being saved from problems that they had created themselves. Both Bush and Obama bent over backwards not to prosecute criminal activity (see William K. Black for details). Meanwhile everybody else lost their houses and their jobs, and the job situation still ain't looking too good. While that isn't, at least strictly speaking, the stock market, is it any wonder that people don't trust financial markets and think the game is rigged.
Are we so intent on class warfare
"Class warfare" gets my vote for the most hackneyed and ultimately meaningless term of the century. What exactly is "class warfare"? From it's reflexive overuse, I can only infer that it means that any discussion of economic conflicts of interest between people of different wealth and income levels should be forbidden as crass, petty, uninformed, counter-productive, and most importantly, something that people who use the term "class warfare" don't want to discuss.
Re:MUAHAHAHAHA (Score:5, Informative)
"Class warfare" gets my vote for the most hackneyed and ultimately meaningless term of the century. What exactly is "class warfare"? From it's reflexive overuse, I can only infer that it means that any discussion of economic conflicts of interest between people of different wealth and income levels should be forbidden as crass, petty, uninformed, counter-productive, and most importantly, something that people who use the term "class warfare" don't want to discuss.
"Class warfare" does mean something: It means that poor and middle-class people are complaining and reacting to being shafted by rich people, but the person who's writing wants to make it seem like those complaints or reactions are somehow illegitimate or will lead to Stalinism in America.
Re: (Score:3)
I wonder how many French nobles wished they had embraced gradual reform as they were carted to the guillotine?
Shush (Score:2)
I think this is a terrible problem with education in America. People are afraid of the market, don't understand it, don't want to understand it, but that's due to simple lack of education. And it's important to know the basics, since it will likely affect your standard of living in retirement.
Just like there's a certain minimum amount you need to know about how cars work before you can drive safely - not all that much, but there are a several hours about it in most drivers ed classes - there's a certain minimum amount you need to know about how markets and investments work. Where's the public education for that? Are we so intent on class warfare that we'll cut off our nose to spite our face here?
I've already made more from my stock and mutual fund investments this year than I'll make in salary. Now I'm going to post a response to the guy who talked up how scary market investing is so I can scare more people away from the market.
Just kidding about scaring people away. Making money in the stock market isn't a zero sum game. The more players there are and the more money invested, the better it is for everyone except the people who sit on the side lines becaused they're scared/don't understand/don't
Re:MUAHAHAHAHA (Score:4, Informative)
Think of it this way. It's like Las Vegas. Except it's legal everywhere and there's less oversight to keep people honest. Oh, and if you are dishonest, they just take back a portion of your ill-gotten gains, instead of breaking your legs.
Re: (Score:2)
Why not spend some time reading, then? It's not rocket science, and like it or not, this is how the game works. To remain ignorant to how wealth is generated in this country is to give up. Time and something as simple as dollar cost averaging $10-$20 a week in extremely low risk mutuals could get you a better future life than bitching about "Elitists" and sticking your money in a mattress (or blowing it all on crap every month). The market is comprised of "common people" investing for a better future.
Re: (Score:2)
I'm not even sure what the stock market *does*. I don't think many people do. Including the people who run it.
You can make that statement with nearly every human endeavour. Nearly everything (computer, cars, etc), rely on so many layers of abstraction that nobody really knows what is going on...
Sadly, it is the illusion of knowledge [wikiquote.org] and the illusion of control [wikipedia.org] that dominate most things that we as a species do (stock market included)...
The superficial reason for the stock market is to employ middlefolk who match those wanting capital with those who have capital (kind of like a grocery store matches those wanting f
Re:MUAHAHAHAHA (Score:5, Insightful)
Re:MUAHAHAHAHA (Score:5, Insightful)
One notable difference between a casino and the stock market is that in the stock market, the odds are in the your favor.
Not any more, for 3 reasons:
1. There is now the equivalent of the House on the stock markets, in the form a few banks who control the majority of assets [milkeninstitute.org].
2. The largest investment banks can and do rig almost everything, from International interest rates [wikipedia.org] to aluminum commodity pricing [bloomberg.com] to municipal bonds [rollingstone.com].
3. HFT combined with premiums paid for slightly early releases of information [nytimes.com] mean that by the time an ordinary investor has heard about a serious problem in one of their holdings, the damage is already done because someone else found out and reacted to it 2 seconds earlier. In other words, the true price of your assets is based on information you can't see.
Re: (Score:3)
If you actually invest (like the GP said) and don't speculate, the odds are still in your favor. Things like 'getting information 2 seconds earlier' do not affect investors, they affect speculators. Unless the entire market is permenantly and constantly losing money (it isn't) the odds are in your favor if you buy and hold a diversified portfolio.
Re: (Score:3)
I feel indifferent. (Score:5, Interesting)
I'm an old school (1930s era) value investor - Ben Graham [amazon.com] type of investor.
I don't give shit. I don't care what the know nothings on CNBC have to say (I don't think Becky is all that, BTW) nor do I care what Warren Buffet has to say - publicly.
I got an alpha of 20% right now and it's freaking me out because I'm thinking there's something wrong with my calcs. No, overall I'm up like 50+% year to date but I'm freaking out because i KNOW - I KNOW - there's luck involved and I WANT to weed it out so I can plan better.
If I were a Hedge fund or mutual fund manager, I'd be interviewed in the press and folks would be patting me on the back for my "brilliance" - fucking morons- all of them.
I got LUCKY and I'm too stupid to figure out where!!
Re:I feel indifferent. (Score:4, Funny)
Smart man. Playing the day-trading game against the HFTs is like playing chess against Deep Blue. Might as well have a weight-lifting contest with a forklift.
Re: (Score:2)
Read the whole comment ... and let it sink in for a moment .. before you try to sound smart about something you didn't fully comprehend.
Re: (Score:3)
Hold only works as long as a company is able to expand its business into new markets. After a point, every stock gets into a cyclical pattern where it oscillates by some percentage of its price each year.
The length of the oscillation in most cases matches whatever the tax favored length for long term versus short term is. So at some point, it doesn't pay to just hold. You can do much better by selling somewhere near the top of the currently yearly cycle and buying somewhere near the low. You don't have to
Re: (Score:2)
Re: (Score:3)
Re: (Score:2)
It's not about whether you have a high alpha and now things are dangerous. That's not how it works.
Re: (Score:3)
Does this make anyone else happy for some reason?
Only people whose total understanding of global economics comes from things they've read on Slashdot.
Re: (Score:2)
Re: (Score:2)
Market manipulation? No that doesn't make me happy.
Shouldn't you be occupying something?
It's Just a Casino Anyway... (Score:5, Funny)
Right about now ... (Score:5, Funny)
- Flop sweating their asses off
- Furiously searching their email for that ass-covering memo to their boss about the pricey "redundant this" or "redundant that" that the boss was too cheap to get
- Wondering if there is enough alcohol on earth for what they will need later tonight
Re:Right about now ... (Score:5, Funny)
- Flop sweating their asses off
- Furiously searching their email for that ass-covering memo to their boss about the pricey "redundant this" or "redundant that" that the boss was too cheap to get
- Wondering if there is enough alcohol on earth for what they will need later tonight
This is the stock exchange. "Redundant this" and "Redundant that" were in the budget, and alcohol is plentiful.
Re: (Score:3)
, and alcohol is plentiful.
I think I found the problem....
Re: (Score:2)
Yeah, it's a software problem of some sort, no way it's anything hardware related.
Don't forget about... (Score:5, Funny)
... the group of MBAs ...
- Flop sweating their asses of
- Furiously searching their email for that ass-covering memo where the IT guy said "Yeah, this should work"
- Wondering if there is enough coke on earth to get them through the rest of the day
For these guys, there are only two universal truths:
1) This is absolutely, positively, 100% the IT guy's fault
2) He can not fix this without the IT guy.
The impotent rage would be palpable.
Re: (Score:3)
That's OK... the MBA's get their vengeance by asking the server admins for a status update every 5 minutes while they are busy trying to fix the problem.
Then they'll ask IT for a 20 page root cause analysis report of the outage the following day after service is restored, even though they have no intention of reading it past the first paragraph. Not that they would understand what they were reading anyway.
LET CHAOS REIGN (Score:5, Funny)
Quick, everybody spread rumors about shutdowns and buyouts, those Wall Street fatcats will shit their pants! >:D
"Technical Issue" (Score:2)
a.k.a Market Crash
Same thing with the crooked banks, when they have a Holiday now, and you can't get your money out, it is a "Hacker" or a "Terrorist" or some other garbage.
-Hack
Ran out (Score:2, Troll)
Re: (Score:2)
They'll have to orphans into the sump tank like in the old days!
(rather than just harvesting their tears and refining it into Greed Oil)
Re: (Score:3)
*to throw orphans. I accidentally the whole thing :-(
I don't understand the need for high-speed trading (Score:5, Insightful)
Re: (Score:2)
Re: (Score:2)
Re: (Score:3)
Re: (Score:3)
HFT won't guarantee a winning trade however,
Yes, it does. At least the way it has been set up. HFT lets some traders outbid others by submitting a whole series of offers and then canceling the one that won't make them any money. Its an abuse of a feature demanded by HF traders to unwind 'system errors' created by such rapid transactions. In reality, its like being able to put a bet down at a roulette table and then pick it back up quickly when you see where the ball lands.
Its fraud and HF traders should be in prison. Except that the brokerages like
Re: (Score:2)
Which means there is also $1B+/year in losses to someone, caused by HFT. Guess what? If it's the HFT traders making a profit, it's the investors taking the hit.
Re: (Score:3)
I think what you want to say is “only a billion” – as in it is small and falling number in historical terms.
Then let’s view trading costs as analogous to waste friction in a mechanical system – the lower the better. How should we measure this waste? Read up on “Implementation shortfall”. It’s the gold standard in the industry. (Rarely implemented because it’s complex, but still, the best theoretical method of measuring waste.)
Now, anybody claiming much
Re:I don't understand the need for high-speed trad (Score:4, Informative)
You don't make money by "getting in the middle of slower orders" in any risk-free way. Markets don't work that way. You do make money by being the first to trade on "news", but better that than insider trading (i.e., better to trade 1 ms after than 1 week before). You do make money by taking a little risk as a market maker, but HFT has squeezed profits there very thin.
Do you have any idea how tiny $1 B/year is compared to the amount of stock that trades each year? I'm sure profits are much higher, just on first-after-news trading, and that doesn't mean there's a problem.
When I trade (being a little guy who doesn't follow the markets constantly) I get a better price thanks to HFT: the bid-ask gap is tiny these days, often 1 cent, and my broker makes $10 on the same trade the HFT guy makes $0.01 or so.
HFT and bitcoin... (Score:2)
The rise of HFT is similar to bitcoin. To encourage liquidity in the market, exchanges started to offer a slight rebate to organizations that put standing side orders to trade a stock at the current best price (buy or sell) which would be executed if there was a temporary liquidity problem. Analgously, Bitcoin offered a little bit of payback to those that did the transaction hash work to help assure short transaction validation times.
Initially, large trading platforms that were acting as Supplemental Liq
Re:I don't understand the need for high-speed trad (Score:5, Interesting)
Sure.
In the old days (80s, 90s), when it was seconds, the middle men grabbed 12.5 to 25 cents per share. Before then, when it was minutes, they would grab 50 cents. Costs for the average small investor have fallen by over 90%. If you invest in index funds your costs have fallen by over 95%. (But wait you say – I don’t trade my index funds. Look at your funds expense ratio, pull out the supplementary prospectus information on what portion of that is trading costs for the past 20 years, and gap.)
Or, to put it another way, would you rather have dozens of HFT fighting for your business or an oligopoly of clique, cozy partnerships. Not saying it is perfect but that it is an improvement.
Re: (Score:2)
I just wish the market operated on a tick.
As things are now, they're supposed to be first come, first served. That's why all the HFTs pay mega bucks to be collocated in the same datacenter as the exchanges. This means any hickups affect the order that things are processed. It's non-deterministic by design.
It makes much more since to run on a tick. All transactions would processed once every second. You still need some sort of ordering, but it would allow for many things to happen. Including realtime o
Re: (Score:2)
I was responding specifically to the OP ½ cent mark. In the 90s, under fully electronic trading, the bid/ask spread was between 12.5 to 25 cents . Today it is under a penny. Why the compression? Computers are not like fairy dust – sprinkling them around does not automaticity solve problems. It is the fact that we have gone from 4 market markers to dozens of HFT acting as de facto market makers.
(Which then brings up a tricky question of what a HFT is. The big boring index funds trade like a HFT in
Re: (Score:2)
Re: (Score:2)
Seriously. Is there any real need (beyond that for connected players to be able skim money off the top) for anyone to be able to sell and buy stock (or commodities) in a tiny fraction of a second, instead of say, once every fifteen minutes or even longer?
Time is money. Time passes as new information is acquired or transmitted. Shorter time intervals will therefore always be desirable for making a market more efficient and to accurately reflect reality. The more time it takes to buy and sell, the more risk there is in buying or holding stock, because the stock is less liquid and its value can change dramatically in very little time.
Re:I don't understand the need for high-speed trad (Score:5, Funny)
Seriously. Is there any real need (beyond that for connected players to be able skim money off the top) for anyone to be able to sell and buy stock (or commodities) in a tiny fraction of a second, instead of say, once every fifteen minutes or even longer?
Time is money. Time passes as new information is acquired or transmitted. Shorter time intervals will therefore always be desirable for making a market more efficient and to accurately reflect reality. The more time it takes to buy and sell, the more risk there is in buying or holding stock, because the stock is less liquid and its value can change dramatically in very little time.
Wait, wait, wait. I'm grokking some of the other points in favor of high-frequency trading, but are you actually claiming that the stock market reflects reality?
Re: (Score:2)
Yes. Just like you can't make a very good car if you only have one cylinder fire ever 15 seconds (though you could make something with wheels that lurched about). I've explained the technical details about a dozen times on /. before, so at this point I'll just say: you know that guy who believes "I don't understand it so it must be easy"? Don't be that guy. Education, then opinion.
Re: (Score:2)
beyond that for connected players to be able skim money off the top
Let me stop you right there.
Re: (Score:2)
adds money into the system from the people willing to "invest" into the funds that do this
most of the trading every day is a tiny percentage of shares traded by hedge funds
Re: (Score:2)
Re: (Score:2)
Average daily volume on the NASDAQ is a little over 400,000,000 shares for the last three months. Even with the outage, today's volume was 924,433,630 shares. Do you really think slowing that down to only trading on some specific interval would work? Plus, you have to remember that people decide to buy or sell on something other than your schedule and the whole point of a stock exchange is to price the security and execute the trade. All putting in some sort of fixed interval would do is force traders t
obvious (Score:3)
Re: (Score:2)
Re:obvious (Score:5, Informative)
Specifically, NASDAQ runs UTP from NYSE-Euronext.
http://en.wikipedia.org/wiki/Universal_Trading_Platform [wikipedia.org]
UTP runs on Linux [pdf link].
https://nysetechnologies.nyx.com/sites/technologies.nyx.com/files/L5756_NYSE%20Tech%20UTP_IM_OST_100105b.pdf [nyx.com]
Re: (Score:3)
Correction. NASDAQ does not license NYSE-Euronext UDP. They run NASDAQ-OMX INET. They are the major competitor for trading platforms to Euronext.
INET, however, also runs on Linux.
Mea culpa. Too many tabs onpen.
Goldman must have lost money on a trade (Score:4, Interesting)
Re: (Score:2)
Re: (Score:2, Informative)
No, it's not mathematically impossible. It is statistically improbable.
Re: (Score:2)
It's not that hard to do if you just buy it when the price is low.
Too many individual investors wait until the market is near all time highs before buying.
interesting timing (Score:2)
Emergency Averted. (Score:2)
Assuming Direct Control.
2:45 (Score:2)
My prediction is a brief panic sell-off, followed by a return to normalcy, considering putting in a few limit orders.
Re: (Score:2)
No problem (Score:2)
This software is all written in Java these days, isn't it?
Probably just paused for a few hours for garbage collection.
Is this related to the Hindenburg Omen? (Score:5, Interesting)
http://finance.yahoo.com/blogs/breakout/hindenburg-omen-very-ominous-high-technical-warning-sign-163004190.html [yahoo.com]
I wonder if there is a relation?
Dang that NSA server crashed? (Score:4, Funny)
Technically this only affected NASD options (Score:2)
This really only affected the gamblers in the market using NASDAQ options, not people buying and selling actual shares.
It didn't impact limit orders up/down, or any buy or sell orders, just the gamblers that exaggerate noise in the market signal to bet against other computer systems that exaggerate more noise.
No actual investors were harmed, only gamblers. You could see it in the calm reaction of the shares - instead of bouncing up and down as gamblers tried to tweak it up and down for profits, it remained
High frequency trade death spiral? (Score:2)
Could they be proactively stopping another feedback loop?
Re:Hmmmm (Score:5, Funny)
Re: (Score:2)
Nobody cares about Europe so that is why its not news. They only work 6 weeks out of a year anyways, and then that is only to strike for more holidays.
Re: (Score:3)
FWIW, I don't rate day traders much higher than I do HFT traders. Both are parasites....occasionally slightly useful, but not sufficiently enough so to justify their existence.