Sunday, November 2, 2014
Flash Crashes, Software Glitches, "Fat Finger" Trades and Flash Spikes Continue Occurring with Frequency and are Ignored by US Regulators
The flash crashes and flash spikes continue to occur with frequency in the stock market. The same excuses such as "software glitches, technical malfunctions and the proverbial "fat finger" trades are blamed to sweep the incidents under the carpet. Human greed runs rampant as wealthy traders rape the upside in the stock market courtesy of the Fed and other central bankers' easy money. Capitalism and the free market system is completely broken in America. How will it end?
Keystone documents the technical problems occurring at exchanges since the May 6, 2010 Flash Crash event. That way, when the next epic flash crash event occurs, the regulators and officials in charge of exchange and market oversight, as well as the exchanges themselves, will not be permitted a free pass. The power brokers in America are fully aware of what is going on they simply do not care. Instead, the Fed and other central bankers print money to send the stock market higher to enrich themselves and the elite class in America and when the next flash crash occurs they will simply chalk it up to the proverbial "fat finger" trade. The ever-expanding list below is extremely concerning.
5/6/10; Stock Market Flash Crash; the crash begins at 2:42 PM EST with the Dow plummeting about 1000 points (-9%) in minutes but recovering most of the drop by 3:07 PM; $862 billion is lost in minutes; the retail investor is bludgeoned since the stop limits are hit for positions flushing them out at significant losses only to see the stocks to then recover in quick order.
3/23/12; BATS IPO Debacle; results in AAPL circuit-breakers triggering a halt in trading; AAPL resumes trading in quick order but the BATS IPO is cancelled.
5/18/12; FB IPO Disaster; results in a black eye for FB, dubbed FacePlant, and the Nasdaq exchange; traders were not updated on the status of trades resulting in an epic failure.
8/1/12; Knight Capital Trading Glitch; the trading algo’s suffer a technology breakdown spewing out erroneous pricing for about 150 NYSE companies causing a collapse in Knight stock and a loss of 75% of its equity value; the company was sold to Getco forming KCG Holdings.
4/17/13; DAX, CAC, FTSE and Currency Market Mini Flash Crash; Germany leads a mini-flash crash event lower for European markets; the indexes recover in quick order and the collapse is likely due to rumors of credit downgrades pending for European nations.
4/22/13; GOOG Mini Flash Crash; at 9:37 AM EST GOOG price collapses from 796 to 775 (-2.6%) in one second’s time; dark pools are partially to blame.
4/23/13; AP Twitter Whitehouse Hack Attack; a mini flash crash occurs due to a tweet saying an attack has occurred on the Whitehouse; markets quickly recover when the attack is exposed as a hoax.
4/25/13; CBOE Software Glitch; outage occurs prohibiting access to CBOE options on the S&P 500 and VIX; trading resumes in the afternoon resulting in a one-half day outage.
5/1/13; AMT and FMC Mini Flash Crash; price discrepancies cause quick drops and recoveries.
5/17/13; APC Mini Flash Crash; at-the-close orders had to be cancelled.
5/23/13; AEP, NEE and UTIL Utilities Sector Flash Crash; the orders with faulty price levels are not cancelled.
6/6/13; Euronext Exchange Software Glitch; delays the opening of the European indexes for one hour.
7/5/13; NYSE ARCA Computer Glitch; a computer malfunction occurs interrupting the quote system.
8/2/13; CME Treasury Futures Halt; futures stop trading for 5 seconds due to circuit breakers kicking in just before the Jobs Report.
8/6/13; BATS BZX Exchange Glitch; the exchange is not accepting orders due to system issues and Nasdaq routs the orders away from BATS.
8/8/13; USNA Flash Crash; the USNA flash crashes -10% at 1 PM EST and takes down other multi-level marketing stocks HLF and NUS but all quickly recover.
8/16/13; Shanghai Index Market Swing; the Shanghai pops strongly, then drops, intraday, with the biggest market swing in 4 years; Everbright Securities, a State-owned brokerage, is the cause of the error and erratic market behavior due to the proverbial computer glitch once again.
8/20/13; GS Trading Glitch; a GS computer problem occurs at the opening bell involving the routing of options to the exchanges; the problem costs GS about $100 million.
8/22/13; Nasdaq Outage; thousands of stocks stop trading due to a technical problem with Nasdaq securities; the outage begins 12:14 PM EST and ends 3 hours and 11 minutes later at 3:25 PM; about 3200 companies are affected including AAPL, FB, GOOG and MSFT; SEC Chair White calls for a meeting with Wall Street leaders to insure that markets function continuously and orderly; the SIP (Securities Information Processor) feed may have caused the error.
8/25/13; Tel Aviv Flash Crash; a fat finger causes Israel Corporation to plummet 99.9% in five minutes time which sends the TA-25 Index down -2.5% and triggers a shut down; markets recover over the next three hours.
9/4/13; Nasdaq Software Glitch; the Nasdaq experiences another software glitch situation with the SIP feed just like 8/25/13 but the shutdown was only about six minutes; between 11:35 AM and 11:41 AM; NYSE ARCA says the outage was 9 minutes in duration and affected all Tape C (Nasdaq) stocks.
9/13/13; CBOE Options Outage; two CBOE options platforms experience outages but the situation is corrected quickly.
9/16/13; OPRA Outage; U.S. option trading is halted at 1:40 PM EST due to a problem with the Options Price Reporting Agency (OPRA) data feed; a first attempt at restart fails; about 17 minutes later, options begin trading again with minor issues.
10/29/13; Nasdaq Software Glitch; the Nasdaq Composite Index (COMPQ) experiences a glitch at 11:53 AM EST where the index will not update due to a data service feed problem but the individual stocks in the index continue trading; the Nasdaq begins updating again at approximately 12:40 PM; the problem is blamed on human error and involves the Global Index Data Service (GIDS 2.0).
10/30/13; Deutsche Boerse Interruption; data transmission is interrupted at Deutsche Boerse AG (DB1)’s International Securities Exchange.
11/1/13; Nasdaq OMX Group Options Exchange Closure; the options exchange closes at 10:36 AM EST citing technical errors; a significant increase in order entries (probably due to HFT) inhibited the system’s ability to handle the option volume and provide accurate quotes; trading continues on 11 other option trading platforms; the Nasdaq Options Market did not reopen for trading.
11/7/13; OTC Outage; on the day of the TWTR IPO, at 11:25 AM EST, transactions are halted for over-the-counter (OTC) stocks due to a lack of quotation information; the OTC resumes trading 3-1/2 hours later at 3 PM and blames one of its network service providers for the computer glitch.
12/23/13; RUT Small Cap Index; a Flash Spike occurs sending price above 1200, +6%, at the opening bell, then within 15 minutes price collapses -6%. The media does not mention the event.
12/24/13; Copper futures flash spike higher to 3.45, a gain of +4.6% above the opening price at 3.30, due to an ‘error trade’. Price drops about -2.5% and copper closes up +2% on the day. All trades above 3.42 were settled at this level.
12/26/13; AMTD trading pre-market sky-rockets to 130, +330%, from a closing price of 30.44 in the pre-market. The trade is dubbed a ‘fat-finger’ trade and is cancelled.
1/6/14; A bulk selling move occurs in gold futures where gold drops from 1247 to 1232 then back up to 1240 in one minute’s time. GLD, the gold ETF, drops from 120 down to 117, -3%, then back up to over 119 in 60 seconds time. The proverbial ‘fat finger’ excuse is blamed for the event. Later in the day the CME labels the event as a ‘velocity logic event’ and says gold trading was suspended for 10 seconds.
1/7/14; After the opening bell, the NYA leaps +10.4% higher to 11335 a phenomenal 1065 points. Price immediately collapses in a flash crash dropping -9.0% to 10310, plummeting 1025 points. The drama occurs in two minutes time and is an almost 20% overall move for a major index in only 120 seconds. Wow. An equivalent move, had it occurred in the Dow would have been 1700 points up and down, and the SPX would have been 200 points up and down. More interestingly, the event is swept under the rug and no one pays any attention.
1/10/14; At 8:30 AM EST, less than one second before the Monthly Jobs Report number, the buying activity in the 5-Year Treasury note (likely due to HFT) overwhelmed the price causing a stop logic circuit breaker to trip and shut down trading for 5 seconds. The jobs number was released as the markets were frozen in place. Trading resumes and the event is swept under the rug like the others.
1/10/14; At 11:42 AM EST, Nasdaq options trading for symbols A through M fails. The Nasdaq says the OMX experiences an issue processing the OPRA data. After about 18 minutes the options are back on line at 12 noon. This is the seventh incident in the last 13 trading days.
2/4/14; The NYA drops from 9800 to 4, but immediately recovers back to 9800. The quote systems and chart services expunge the erroneous NYA print but no reason is provided for the computer glitch.
4/8/14; At 1:51 PM EST, the CME Globex global electronic trading system experiences a technical glitch and stops trading in several agricultural and grain commodities including hogs, corn and soybeans. Traders experience a mini-panic since about 90% of the commodity trading volume is handled by the electronic system. Contracts impacted are settled in the pits via open out-cry. The CME resolves the computer glitch and plans to be back on line tomorrow ahead of the USDA World Agricultural Supply and Demand Estimates (crop and ag report).
4/28/14; The New Zealand stock exchange is delayed from opening to begin the new week of trading due to a “system issue.” Trading is halted at 10 AM local time and trading resumes fifteen minutes later. The operator of the exchange, NZX Ltd, provides no further comment.
5/13/14; At 3:49 PM, minutes before the closing bell, the exchanges are experiencing wild action in AOL, NDAQ, NBR, LO, MPC, CNQ and other stocks. The flash crashes and flash spikes are suspected to be erroneous trades. Prices return to the same relative levels as before the one-minute flash moves occurred but the AOL trades are cancelled. AOL drops from 37 to under 33 and then recovers; a flash crash of -11% and then +11% recovery in one minute. NDAQ drops from 37 to under 35 and then recovers; a flash crash of -8% and then +8% recovery in one minute. NBR spikes from 25.7 to 28.2 and then drops to the original price; a flash spike of +10% and then -10% drop in one minute. As usual, the exchanges do not know the root cause but HFT is a likely suspect. The NYSE is investigating the flash moves.
5/19/14; At 1:34 PM, the GTX flash crashes from 5039 to 4718, -6.4%, then flash spikes back up to 5039 at 2:06 PM. No reason is provided for the flash crash in the Goldman Sachs Commodities Index and the media outlets and traders ignore the event.
6/2/14; At 10 AM, the ISM Mfg Index is released as 53.2 a miss from last month’s 54.9. The stock market drops. A short time later, errors are found in the release so the ISM release is changed to 56.0 a healthy beat. Stocks place a bottom for the day and recover. The ISM release is then revised a third time to 55.4 as the actual number. The errors and confusion is blamed on a software glitch that applied the incorrect seasonal data.
6/12/14; Euronext delays the opening of trading on bourses in Amsterdam, Brussels, Lisbon and Paris blaming a software glitch for the disruption.
6/18/14; BAE Systems Applied Intelligence group reports of a serious and sophisticated cyber attack against a major hedge fund in 2013. The event has not been disclosed until now and raises concerns about the safety of large financial firms. The SEC continues to pressure hedge funds and financial institutions to improve cyber security to combat the malicious programs. Another Flash Crash event almost seems inevitable.
7/3/14; India’s BSE experiences an outage for three hours blaming a network problem for the event. Trading resumes and shares move sideways.
8/6/14; At 9:40 AM EST, the 10-year yield collapses. The TNX drops from 2.45% to 2.30% and immediately recovers back to 2.45%; a mini flash crash and recovery. Traders and the media ignore the problem.
8/6/14; At 12:10 PM, the dollar/yen currency pair collapses from 102.30 to 101.90 in a heartbeat then recovers to 102.12 and travels sideways. The usual rumors of a ‘fat finger’ trade are bandied about but no one can identify the exact reason for the mini flash crash; a near -0.5% instantaneous drop. Other dollar currency pairs were affected such as the Aussie dollar. The dollar/yen only precovered a potion of the overall collapse.
8/18/14; A flash crash occurs on the Bulgarian bitcoin exchange platform BTC-e where price drops from 460 to 309 then quickly recovers to 460; a -33% flash crash drop and recovery. The mini flash crashes continue with frequency.
8/24/14; At 8:25 PM EST, the CME halts electronic trading for all markets except Malaysia. Stock futures, Treasuries, oil and gold are all affected. The CME blames technical issues for the outage and trading resumes about four hours later. A cyber attack shuts down Sony Playstation users at the same time sa the CME outage with a hacking group “Lizard Squad” claiming responsibility.
9/16/14; At 8:28 AM, the PPI data is “accidentally” released early. The Department of Labor supposedly has a master switch that permits the news services to report the data simultaneously but obviously the data was leaked ahead of time. Wall Street is an insider’s game.
10/1/14; A major failure occurs at the Tokyo Stock Exchange when stock orders for nearly 70 trillion yen (a huge $640 billion) are placed and cancelled. Orders in over 42 companies are affected according to the Japan Securities Dealers Association. Ridiculously, the error involved nearly 60% of TM shares. As usual, a ‘fat-finger’ is blamed for the erroneous trades but an HFT algorithm may have gone astray. Traders proclaim they have never seen orders this large cancelled. The US stock market sells off strongly hours later with the Dow losing 238 points.
10/17/14; At 11:05 AM EST, all OTC (over-the-counter) trading is halted due to technical issues with the data feeds. NYSE and Nasdaq trading is not affected. OTC trading systems are off line unable to update quotes. FINRA lifts the halt at 12:45 PM EST and normal trading resumes after 1 PM. The obscure ‘technical glitch’ excuse is blamed and the incident is swept under the rug. The flash crashes, flash spikes and software failures occur with frequency across all exchanges.
10/30/14; At 1:07 PM EST, a SIP (Securities Information Processor) failure occurs which is the data feed link between all the exchanges around the world. In one second, 15000 E-mini S&P’s were traded which may have triggered the shutdown. The technical outage creates odd prices for the same stock across different exchanges including the NYSE, Nasdaq and BATS. For example, a stock is priced at 103 on the NYSE but on another exchange is priced at 96. Market participants note the problem and pull orders. Trades that went through at erroneous prices are rectified during the afternoon. Several brokerage firms shut down trading temporarily. ITG, an electronic brokerage, halted trading in its POSIT dark pool for about fifteen minutes. Systems are brought on line and functioning properly at approximately 2:10 PM. The technical glitches continue to occur routinely at exchanges with nothing done to prevent the problems since there is no cross-regulatory oversight. Adding more intrigue, the SPX immediately catapults higher from 1988 at 1:07 PM and peaks exactly at the HOD at 1999.40 when the data feed is back on line at 2:12 PM. The SPX is goosed 11 handles higher with inflection points occurring directly at the start of the outage and at the end of the outage. Why did that happen? Is Wall Street and the stock market rigged? Of course it is. The S&P E-mini trade created vast wealth as the Japan double-whammy shock and awe stimulus was announced only hours later in the overnight session resulting in a huge stock market melt-up on 10/31/14. Wall Street is a corrupt insider’s game and the retail investor is used as cannon fodder. Is another flash crash lurking in the background?