Gordon Brown, then Prime Minister of the UK, said we had seen the end of boom or bust in what was obviously an unsustainable boom.
Politician and Dustbin Man. Two jobs that don't require qualifications and involve dealing with trash.
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Apple Stock Trading Halted Briefly on Sudden 9% Drop
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Gordon Brown, then Prime Minister of the UK, said we had seen the end of boom or bust in what was obviously an unsustainable boom.
Politician and Dustbin Man. Two jobs that don't require qualifications and involve dealing with trash.
LOL I love that line, definitely using that, thanks
Since I bought in at under 60, I wasn't too concerned
I hate you LOL
Playing the stock market is just like gambling. You take a chance the shares will go up but they could just as easily go down. Read any share dealing website and it will say "past performance is not necessarily an indication of future performance".
Market Order
I concur on those mentioned a market order caused this, exhausting the instantaneous supply. One downfall of electronic trading, vs. the old days of someone on the floor matching up orders.
Others place limit orders at extremes on off chances, and they got one on this slight chance.
I concur on those mentioned a market order caused this, exhausting the instantaneous supply. One downfall of electronic trading, vs. the old days of someone on the floor matching up orders.
Others place limit orders at extremes on off chances, and they got one on this slight chance.
This! I understand how circuit breakers work. However one single trade of 100 shares on stock with volume like AAPL cannot cause a drop like that unless there is absolutely no liquidity at that moment. Where were all the liquidity providers (market makers) at that time?
Not exactly.
If you look at any of the broader market indices (like the Dow Jones, S&P 500, FTSE 100, etc.), over the long run (like decades) their performance exceeds that of inflation.
The risk is high if one doesn't have a diversified portfolio: the gauging the performance of any individual issue is highly risky. Diversification in investment vehicles (various industries, bonds, etc.) is a healthier strategy.
Casino games are all created to favor the house. Many mathematicians have done analyses of all the games and the odds favor the house in the long run. Same thing with the lottery. The jackpots are calculated so the lottery organizer takes in more money than it pays out.
I concur on those mentioned a market order caused this, exhausting the instantaneous supply. One downfall of electronic trading, vs. the old days of someone on the floor matching up orders.
Others place limit orders at extremes on off chances, and they got one on this slight chance.
Market order for 100 shares causing an instantaneous lack of liquidity? Maybe on some illiquid penny stock but on AAPL?
I don't understand how a trade of 100 shares, a tiny amount to Apple, could affect the price like that. It shouldn't be possible. Saying this trade caused it makes no sense.
I concur on those mentioned a market order caused this, exhausting the instantaneous supply. One downfall of electronic trading, vs. the old days of someone on the floor matching up orders.
Others place limit orders at extremes on off chances, and they got one on this slight chance.
During the olden days of the floor trading you would see "tight" bid offer spreads of 1/8 of a dollar and for any real size could expect spreads of 1/4 or even 1/2 dollar. You would also pay a stock broker a fee over $100 to execute a trade and often a percentage of funds transacted.
Today for 99.9% of order executions in liquid stocks or indexes (ETFs) you are looking at bid/offer spreads of $.01 or at most $.02. You pay $7 to execute and can log on and have the order executed instantly (what do you care if a professional is making a decision in microseconds if it takes you a few seconds to click a button).
For 99.999% of times the move towards electronic trading and liquidity providing benefit the average investor. Be careful about wishing for a return to the ways of the past when you don't understand how much better you have it today.
The shorters are getting desperate
If I were the paranoid type I'd suspect that some individual or organization might have "engineered" that sudden drop. Let's say that last December you were expecting AAPL to drop by 10% by March 23rd. So you decided to short the stock because you were sure it had peaked.
Fine. But AAPL simply kept on going up. The new iPad is a smash hit (despite it running at up to 15 degrees F warmer than your body temperature.) Tim Cook announced the stock buy-back program to keep AAPL up and to attract more investors. Uh oh. You're about to lose tens of millions because you guessed wrong about AAPL peaking.
So what do you do? You invoke the measure of last resort. The trick you can only use once. You've bribed or extorted a programmer to put a back door in the Nasdaq software. It can be triggered when you need AAPL stock to drop suddenly, at a specific time of your choosing, to cut your losses. (You *were* expecting AAPL to drop, and gambled tens of millions that it would drop, remember?)
So boom. You tell your programmer cohort to trigger the back door. AAPL drops artificially for no apparent reason (to outsiders.) But it drops at the wrong time. It's hard to test this type of feature, so it didn't work properly. You end up losing tens of millions anyway. And all those micro trading software programs snap up AAPL at a 9% discount, within milliseconds of the drop. You and you and your programmer friend eventually get caught. Good luck in prison.
Of course, that's just me. Maybe it was just a bug. Or an alpha particle hit.
If I were the paranoid type I'd suspect that some individual or organization might have "engineered" that sudden drop. Let's say that last December you were expecting AAPL to drop by 10% by March 23rd. So you decided to short the stock because you were sure it had peaked.
Fine. But AAPL simply kept on going up. The new iPad is a smash hit (despite it running at up to 15 degrees F warmer than your body temperature.) Tim Cook announced the stock buy-back program to keep AAPL up and to attract more investors. Uh oh. You're about to lose tens of millions because you guessed wrong about AAPL peaking.
So what do you do? You invoke the measure of last resort. The trick you can only use once. You've bribed or extorted a programmer to put a back door in the Nasdaq software. It can be triggered when you need AAPL stock to drop suddenly, at a specific time of your choosing, to cut your losses. (You *were* expecting AAPL to drop, and gambled tens of millions that it would drop, remember?)
So boom. You tell your programmer cohort to trigger the back door. AAPL drops artificially for no apparent reason (to outsiders.) But it drops at the wrong time. It's hard to test this type of feature, so it didn't work properly. You end up losing tens of millions anyway. And all those micro trading software programs snap up AAPL at a 9% discount, within milliseconds of the drop. You and you and your programmer friend eventually get caught. Good luck in prison.
Of course, that's just me. Maybe it was just a bug. Or an alpha particle hit.
Sorry, I don't know the intricacies of the stock market, but...
Could I decide to spend 600$ to wreck havoc? Buy 1 share at market price, but sell at, say, 3$?
Or better, do that, and buy a **** load at discount price?
I'm sure (I hope) that there are safeguards against this... (Not a financial wizard, am I?)
Could I decide to spend 600$ to wreck havoc? Buy 1 share at market price, but sell at, say, 3$?
Or better, do that, and buy a **** load at discount price?
I'm sure (I hope) that there are safeguards against this... (Not a financial wizard, am I?)
No kidding. The electronic trading mechanisms going bonkers like this is a great argument against using stop loss orders.
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So the market went temporarily went BATS?
That system couldn't possibly have been better named.
I guess a bunch of people returned their iPad 3's .... I'm one of them! Like my Macbook Pro much better!
Actually, no, markets have put in place limits of how far away-from-market a trade can be. In fact, I was involved early in high-frequency trading starting around 2000 (no longer involved) and we'd get "busted trades" every day. At first, these were on a case-by-case basis. And then the exchanges slowly started adding formal policies with explicit limits. You trade outside of those limits, your trade WILL be busted. Our software had maximum limits to minimze the number of busted trades. Sometimes you would still get busted even if within the limits. The limits just serve as prima facea evidence of an erroneous trade.
Here is the NASDAQ policy on "clearly erroneous" trades. Each exchange has it's own policies:
http://www.nasdaqtrader.com/trader.aspx?id=clearlyerroneous
BATS isn't a market-maker. It used to be an ECN and now is an exchange. A market-maker holds an inventory of stock. An ECN or exchange just matches bids and offers from customers.
Yes, I think this has to be the explanation. As I was reading the posts here, I thought it had to be some sort of internal error at the exchange, and this confirms it. I can't imagine that trading in AAPL on BATS is so thin that a single 100-share trade would go that far away from the market. So, it had to be an internal glitch.
It affecting only a range of symbols makes sense because they probably need to run multiple matching engines on ranges of symbols. It's likely that hardware that examines packets switches incoming orders to the appropriate server.
It sounds like a software bug.
If you're having "issues" like this, you have to shut down. Thus the "issues" the BATS own stock is having today, LOL. IMO they acted irresponsibly by continuing to trade knowing they were having technical glitches. I think they let pride get in the way of prudence, because it was their own stock's first day of trading.
What is amazing is that others apparently acted on this erroneous trade, because they should have known that their trades would be busted.
Your market buy order will be executed within very tight spread on a stock like AAPL. Let say $600.
Now you will not be able to enter sell limit order under the market. You will be able to enter sell stop (or sell stop limit) order, which in your case of $3 will hopefully never be triggered on AAPL. Actually it will be busted that away from a market...
No, you would buy one lot at the offer price (probably 598.59) and sell one at the bid price (probably 598.58). The limit price you had attached to your orders would be completely ignored since there is a bid higher than your offer limit and an offer lower than your bid limit.
You essentially lost $.01 on your execution plus fees.
%$#@$#!!!!! Why didn't my this trigger my long position? I would've made some good money in less time that it takes to fry an egg.
Since I bought in at under 60, I wasn't too concerned
I bought under $5 but I wasn't concerned because I don't watch the stock price daily, let alone in real time. Insanity runs in my family so I have to be careful about that sort of thing.
The fact that humans aren't gods and that absolute perfection is impossible?
Possibly alarming, yes, but I've made peace with the universe.