CNBC: Massive Stock Plunge Due To Trading Error, Developing...

[bobbyw24]

www.cnbc.com

[getch36]

I don't believe a word of it........

[moostraks]

lol...un-hunh...this should be interesting!

[Zippyjuan]

One of their linked articles calls it the biggest market drop in history. In points maybe. In percent, no.

[lester1/2jr]

when it dropped automatic trades probably kicked in. the idea that that consitutes an error is ridiculous

[JoshLowry]

http://imgur.com/8Cl00.jpg

[awake]

lol...

[Pizzo]

I trade daily. The market was weak all day for the most part. Then there was a pretty big (what is normally pretty big) drop in stocks, especially preferred stocks, energy lp's and closed ended funds. They tried to bounce but couldn't. As they fell again, equities started falling as well and you had a combo of people and programs selling market and a cancellation of bids. I personally cancelled about 350 bids in 5 minutes. And I'm a small fish in a big ocean. So people selling market with no bids = a recipe for disaster. Most of the prints went off on the ecn's, but there were plenty of big drops as well on the NYSE. Now there was high volume today, but nowhere near approaching high enough to justify some moves. Basically the NYSE did a temp halt in some stocks, so people routed their market orders to ecn's where there were no bids.

[awake]

Tomorrow is going to suck.

[Original_Intent]

One of their linked articles calls it the biggest market drop in history. In points maybe. In percent, no.

in a thirty minute period I would have to say it was the biggest drop in points or percentage EVER.

[lester1/2jr]

pizzo- what finally stopped it?

[pcosmar]

pizzo- what finally stopped it?

PPT I would guess.

It was a reaction to what is happening in Greece.
:(

[pcosmar]

YouTube - Ron Paul: Greece is just the beginning! (http://www.youtube.com/watch?v=lAeO6jLUc4Q)

[Pizzo]

pizzo- what finally stopped it?


The ECN's were trading through the NYSE spread, I'm guessing people got wise to it. While this was going on Jackass Cramer was talking to Erin Burnett, can't stand her either, and they pointed out Procter & Gamble (PG). I think after that people started realizing how ridiculous these prints were, and started buying realizing there wasnt the volume to justify such moves. I cancelled my orders because honestly I thought the Greek protesters got into the parliament and that's what triggered the selloff. Tomorrow will be interesting regardless. Margin calls, traders are a little shook after today, myself included. There's a lot of history as to why something like this was even capable of happening. Of course Goldman is involved in how the NYSE evolved into the hybrid trading we have now instead of a specialist system.

[Sentient Void]

*BULLSHIT* it was due to Greece. The overall and throughout the day 350 point drop was due to Greece and perhaps other, many factors (and maybe partly in the end due to the 1000 point drop).

But it's being proposed, and sounds more likely, that the huge drop then rebound is due to a 'technical error'... a market just DOES NOT respond like that due to a crisis which has been developing for weeks, and already with a market dropping for the past few days...

I have my own theory...

http://www.ronpaulforums.com/showthread.php?t=243273

[lester1/2jr]

pizzo- what is an ecn. sorry to be picking your brain here I just don't really understand all of what you said.

[osan]

www.cnbc.com (http://www.cnbc.com)

CNBC's competence or intentions come into some question here. I take issue with their reporting everything in point losses and then have this to say:

"Keep in mind that the biggest one day percent drop in history was 22.6% in October 1987."

[FrankRep]

NYSE CEO explains selloff

http://money.cnn.com/video/markets/2010/05/06/mkts_nyse_ceo.cnnmoney/

[Pizzo]

pizzo- what is an ecn. sorry to be picking your brain here I just don't really understand all of what you said.


It stands for "Electronic Communication Network". Basically, it's orders executed electronically, not at a physical location. The old NYSE used to have a specialist system. A specialist is a person that would match up buys and sells, and even take positions on his/her own and who's job is to make a "fair and orderly market". ECN's have no such order. It makes for a lot faster market for the most part. When you have sellers, and no bidders, today happens. I've seen things like this before, but not really ever on this scale. And everytime I've seen it, its been after the NYSE went hybrid. NASDAQ has always been run off of ECN's and NYSE's volume is mostlry through ECN's. I'll try to make the story short regarding how NYSE went hybrid. Dick Grasso used to be the CEO of the NYSE. He resisted the NYSE going to ECN's and wanted to keep the specialist system. Elliot Spitzer, former Goldman guy, investigated Grasso's pay package. A package that was given to him from the board for his quickness in getting the exchanges up and running quickly after 9/11. Grasso eventually is forced to resign. In comes John Thain, a Goldman guy. Also, Goldman Sachs underwrites the IPO of ARCA, an ECN. A little while down the road, NYSE merges with ARCA and develops a hybrid system of ECN's and Specialists. Goldman makes a lot of money. Thain eventually goes to Merrill Lynch. The End.

[Matt Collins]

This will give Obama an excuse to call for more regulation.

[Pizzo]

This will give Obama an excuse to call for more regulation.



If anything it should give them a preview of what will be more common if they ever pass the transaction tax.

[dwdollar]

http://imgur.com/8Cl00.jpg

lmao

[Pizzo]

Lots of trades being busted and taken off the tape. Here is the email i got :
Pursuant to rule 11890(b), NASDAQ, on its own motion, will cancel all trades executed between 14:40:00 and 15:00:00 greater than or less than 60% away from the consolidated last print in that security at14:40:00 or immediately prior. This decision cannot be appealed. NASDAQ has coordinated this decision with all other UTP Exchanges. NASDAQ will be cancelling trades on the participants behalf. The stocks affected and the break points will be disseminated shortly."

[Vessol]

This will give Obama an excuse to call for more regulation.

This. Drop the Fed audit and push all the "wall street reform" bull, lmao.

[lester1/2jr]

pizzo- that's interesting. clearly the powers that be wanted the speicalist system to end.

I understand sotheby's was valued at 100,000 a share for a moment yesterday. obviously, they need circuit breakers of some sort

[teacherone]

lulz^^^^^

[newbitech]

please instantly ban me and delete this post


thanks!

[Slutter McGee]

I love unintentional irony.

Sincerely,

Slutter McGee

[lester1/2jr]

spambots will start ww3

[nobody's_hero]

So every time the stock market falls, it's an error, and everytime it booms, it means America is prosperous?

What a fool Adam Smith must have been, if economics is indeed so simple.