After yesterdays' supposed fatfinger boo-boo, perpetrated by we don't really know who, do you think maybe the boo-boo fatfinger person was working for someone who stood to gain by crashing the market? Call me curious. Lots of stop orders got took out in seconds and then oh gee look it all came back up only now the money belonged to someone else. Wow. Inspires investor confidence.
I dunno about anyone else, but I think computer generated trades need to be make illegal. Individuals just can't compete with that.
I think individual investors should insist that this get fixed, and soon. We have clout. We can sell and sit on the bench. And we should if they don't fix the system. Let wall street cannabilize one another for a few days and see how that sits with them. They NEED us but they rely on us not being organized enough to do anything en masse. Just like Politicians do. Just like everyone who wants to take advantage of the systems in place does.
Obviously, I'm pissed. Any other thoughts on this?
I was a Nasdaq trade for many years---I agree whole heartedly with you---major restrictions should be placed on computer generated trading programs---they are dangerous to overall market and totally unfair to the average investor.
All that need be done to blow up these programs is to reinstitute the uptick rule and go back to trading in 1/8s.
The programs themselves take advantage of shorting on down ticks and will take advantage of pennies.
When the NYSE slowed down the electronic market making function to calm the selling, the specialists took over the market making. That took out all of the electronic bids that were there milliseconds before. As a result, electronic bid ask programs on the other exchanges shoved the prices down to extreme levels in a matter of seconds as they are programmed to lower the bids in low liquidity environments. Every time the computer calculated the number of bids and the bid prices it lowered the price again. This happened many times a second for a period of minutes until it was clear the machines were the cause. By then it was too late to defuse the bomb.
We seem hell bent on routing out all of the physical terrorism even to the point of throwing out Miranda rights and revoking citizenship for suspects of physical terrorism, but we completely rule out any punishment for financial terrorism. Why is that??? Isn’t all terrorism? Terrorism.
The SEC is obviously incapable by ineptitude or by influence to stand up to the houses. The market can only be described as open at all times. There is no way one can claim the markets are fair and orderly. Somehow we individuals as shareholders and retail investors have lost all of the rights as owners of the shares. The boards of directors who we supposedly elect are in fact appointed by the executives. Furthermore, our rights to ownership of shares are taken away when the MARKET, whoever they are, can borrow our shares and sell them without our consent.
Not that it will do any good, but I suggest everyone should write their congressmen and demand that this type of trading be stopped. If not stopped at least curbed in a way so the market will COMPLETELY shut down for 15 minutes and retail orders can be matched and filled before the programs are allowed to continue the pursuit of trading profits for investment firms.
What we have now is not capitalism but rather Vegas style gambling. Some will say that if you don’t sell, the market will come back at some point and you won’t be hurt. That would be a logical argument if everyone has the same chip stack. But when the large houses have chip stacks dwarfing the retail trader, the trader can’t even win with pocket aces. At some point, the investment houses will go all in on every hand and will eventually win. You can double up several times with better hands but if you are all in for your life on every hand, the house will get lucky one time and bust you. They never run out of chips and retail can’t win.
Someone needs the balls of titanium to simply walk in and tell the trading firms that enough is enough. Yes, they have a most powerful lobby but the game is so unfair that retail investors are ready to leave and not come back.
The fixes are simple. They always are. Unfortunately, we will get a long paper full of big words and lots of stats that will lead to few if any fixes. For all that say, “we despise bailing out Wall Street,” we sure do a lot of bailing out Wall Street.
What you say makes sense, but implementing that will be difficult if not impossible. This perpetual shenanigans is certainly old. Just when you start to feel comfortable again and let your guard down for a minute the shysters eviscerate you. Of course you hear the same old crap that it’s the “market”. It just so happens that this so called error occurred at prime time during an already unstable market. I do not envision that we will ever see an environment where a person can invest money and look for it in retirement.