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Tesla's April Fool's Joke Spoofs Market Algorithms
Okian Warrior writes Yesterday, Tesla's twitter feed and blog announced the new "W" Model. Meaning "Watch" (as in "wristwatch"), the announcement Included a photo of a watch spouting a cumbersome "Big Ben" glued to the face and including this text: "This incredible new device from Tesla doesn't just tell the time, it also tells the date. What's more, it is infinitely adjustable, able to tell the time no matter where you are on Earth. Japan, Timbuktu, California, anywhere! This will change your life. Reality as you know it will never be the same." Clearly, this was an April fool's joke as anyone who reads more than just the headline would immediately guess. The problem is that Bloomberg's fast response team did not. The algos, on massive volume, spiked TSLA stock higher by nearly 1%.
When you're trading in volume by the millisecond for pennies, a $2 swing for an April Fools joke would be a pretty big deal I'd think.
Well, think about it ... say you could pretty much push the value of any stock by 1% just by having your idiot boxes start actively trading.
If you're the brokerage house, you can make a lot of money by planning to cause the price to briefly blip and then make money on the differences.
A brokerage house shouldn't be able to change the price of a stock like that.
Doing it based on a joke tells me just how damned broken that method of trading is. And since all of the trading houses have these algorithms, it's not unprecedented for them to set off a chain reaction.
Basically a bunch of self-serving greedy bastards can materially impact the stock market any time they like .. even if they don't intend to. All to try to rip off money from the market
Lost at C:>. Found at C.
I hope these clowns bankrupt themselves one day with their stupidity.
No, based off what happened last time, they don't go bankrupt. They don't go to jail.
Everyone else's retirement funds take a huge hit and lose value, but assholes^H^H^H^H business leaders like this are too important to fail.
Grammer Nazis - I mod you "troll" unless you actually add something on-topic. Yes, I know I have mispellings in my sig.
So the stock market is being actively manipulated by idiots?
As usual, these people are just parasites on the financial system looking to skim off money before everyone else has a chance.
High frequency trading is essentially skimming off the top for yourself without having done ANYTHING other than having a faster connection.
I hope these clowns bankrupt themselves one day with their stupidity.
this already happened, in 2008. except it didn't bankrupt the bankers, it bankrupted the rest of the U.S. and major parts of the globe.
it bankrupted the rest of the U.S.
Amazingly, I didn't go bankrupt, and neither did anyone I know, and nor did any business that I know of.
IOW, stop regurgitating manifestly false FUD.
"I don't know, therefore Aliens" Wafflebox1
That's how stock markets work - the price is set by a bunch of greedy bastards. If you're also a greedy bastard (or you're the original one) you might lose money trying to get in on these things. If you're not, you don't really care. Unless you make a point of selling on the spike and taking advantage of the greedy bastards.
Of course someone throwing enough money around can change the value of a stock. That's the point of a stock market. This story just says bad things about Bloomberg. You should think twice about buying into anything they manage.
It's not the like the normal up and down swings are based on anything beyond the emotional state of traders anyway.
As for users of fast trading algorithms getting burned... yay?
Indeed. That high frequency trading has resulted in a single point of failure is the real story here. If bloomberg announced this to a bunch of humans, some would buy without thinking, a smaller amount would buy cause they're stupid but most would just laugh at bloomberg's mistake. Computers don't get jokes. Every time a previously unknown trigger occurs there is a chance a feedback loop will blow something up.
Ever hear of a mutual fund, 401k, 403b, IRA, etc... When an auto-trade algorithm hits an action point - lots of people far removed from the system are affected. The effects can be quite serious when one trader's algorithm triggers another's... etc. There have been some very bad days on the stock market triggered by such events.
While these thieves on the other end are high on opium (OPM= other people's money) rolling high, taking insane risks, and all the profits and bonuses are theirs. If they make a loss, they are too big to fail and our taxes will bail them out. If they blatantly lie, cheat and commit felonies, they are too big to jail too.
Realize this. The. joke. is. on. us. They are laughing all the way to the bank (which they own probably).
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Investors are not hurt. Speculators are. I'm good with that.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'