The original firestarter E-Mini sell order program did not complete. It was pulled back when its human owners realized that they were fueling the fire. It was issuing market orders too fast, and as I posted, when you issue a market sell order when all of the buy orders on the books are satisfied, you just gave what you're selling away for free. Print a quote that the S&P 500 is worth zero... and yep, buy orders will come out of the woodwork, but not at the price you want.
Correct reaction: Declare there's craziness going on. Stop trading. Force the crazy player to retract their crazy order. Then resume trading.
This reaction: Let the world go to hell. Then click undo.
The root cause was that an order to sell a security tied closely to the value of the S&P 500 throughout the day got translated as an order to sell a few billion of dollars worth of that instrument right now. They shot right through the entire buy book and that means it's a market order with no matching buy order... submit an order for a penny and you can own an option to purchase shares in the S&P 500. Oops, that can be logically extended that to say somebody thinks the entire S&P 500 just went worthless. w This is why we code nonsense filters. Never take user input without defining you're what expecting to get from that user and what's out of bounds. Did you know "; DROP DATABASE YourDatabaseName;" is not the name of any city in the world?
Such protections exist for the average consumer too. Try shoring a few billion worth of something, and your broker will call your local mental health authorities.
The offending program's owner was found and punished, with regulators saying they're going to create new requirements for all such programs... just a little look before you leap logic would have saved the day.
With the phone logs compromised and the other side of the call making contradictory statements under oath, there was enough room for Stewart's defense to instill reasonable doubt on that charge so the prosecution didn't even bother trying. They did have enough clean witnesses to say she submitted a false log to an investigation, and there's the obstruction of justice crime she was convicted on.
Remember, OJ was found liable for wrongful death in the same killings while he was found not guilty in the famous criminal trial. These are not contradictory results... one jury says they had reasonable doubts, the other jury said it's more likely not he did it.
Where's your proof this fictional baby would have lost money? You're ignoring the fact there was a time period of trades that were reversed as a big click of the undo button.
Yep... and the big winners were people like Marc Cuban who realized his company being worth a billion to Yahoo! as an error (Is Yahoo! of today using any asset they got from him?) and he now teases NBA officials in a way the league doesn't allow because he can afford the fines.
The airbone baby got his stocks and money back when the SEC reversed all trades that happened during the flash crash. The real crime is that your belief in FUD is keeping you out of the market.
First, if the automated trading system had any sort of check that would have flagged this order for review, the flash crash would have never have happened. Yep, things that slow down bad orders are good things. This system didn't look before it leaped.
Then, if there was any sort of a "What do you think you're doing?" questioner like the NYSE used to have when it was the only option in the form of the specialists, the order would have been corrected and the flash crash would have never happened.
Third, the LRPs were ineffective because they couldn't generate enough buy orders fast enough... and they didn't serve as stopdowns because there were other places still functioning. The damage was limited because the firestarting order was killed mid-way... anything that could have slowed down its execution was a good thing that let them kill it with less damage.
Fourth, this was bad thing to put at an extreme discount. If something based on the S&P 500 is headed down-down-down... that's 500 issues where functioning systems see... hmm, I want to buy this stock, but it's cheaper to get the whole S&P 500 right now so I'll take that and get 499 stocks free. There goes the buy books on the entire S&P 500 and yeah, people will notice that.
3. Slowing down the trading on NYSE did not help but rather hurt by locking up liquidity. Shitty NYSE Arca systems that handle ETFs overloaded and further exacerbated the problems.
The reason why the NYSE slowdowns didn't help but rather hurt was because they weren't honored by the electronic exchanges, which saw sells and buys and matched them as fast as they could with no slowdown or any sort of review.
Where's Clippy when you need him? "You're about to delete hundreds of millions from you're firm's value! Are you sure you want to continue?"
It wasn't the phone company record that the call took place, it was her company record about what was discussed during the calls.
Her phone records that she presented investigators showed she had a pre-existing stop-loss order to sell the stock if it traded below $60, but others testified that was a lie fabricated after the illegal info was given to her. So, there's your obstruction. Yep, they couldn't prove the crime but could prove the cover-up.
Fire up the Wayback Machine, we're headed to March 4, 2004. Fox News, Forbes, USA Today
Most cookies are unique values to identify you to web sites, and therefore also to ad networks. The more info about you that can be associated with that ID, the more they can specifically target you.
The UDID might be a value that's random, but if ad networks can tie your usernames to the UDID, then they can uniquely identify your phone as you, and tie that to the targeted information.
The problem was there's similar rules for crashes of individual stocks, but those rules were only at the NYSE and not everywhere. Now they're everywhere. Problem solved.
The obstruction of justice was the fact she faked the phone records, therefore destroying the evidence that would have led to a conviction on insider trading.
Maybe I live in a over-ethical world, but as a programmer I feel a responsibility to tell my customers when they're risking a situation they might not like.
A LRP is a technical name for "time out" and is effectively saying "STOP TRADING! We, as market makers in this issue see that something crazy is happening here. It's changing value far too fast, either up or down, and either somebody's sending orders that don't match the rest of the world, or there's breaking news about this stock and it's only fair to wait for that news to spread. Everybody, let's come to an agreement on the value of this thing... take a look at what just happened and let's get some more orders in here. This thing is not liquid enough... and we don't want it going to infinite heights or zero unless it really deserves it."
The problem was, while orders at the NYSE were safe, there's far too many other places you can trade stocks, and they didn't stop at all. As I said before, a limitless sell order with no matching buy is an offer to give the stock away for pennies. That's an LRP situation at the NYSE, but other places just match it up with buy orders and made some people extremely lucky. That was a foul play, and the SEC busted such trades. New rule: When the NYSE rules say stop, now an SEC rule says you stop too.
Automated trading in a proper use is to things like... "Check list of bankruptcy filings. If I own something on that list, get rid of it NOW!" CNBC covered Worldcomm and Enron in a way it doesn't usually cover penny stocks because they wanted to hammer home the point to people who still had it that there was still time to get a few cents per share and that's better than riding it to zero.
It's perfectly legal for a business to say "We think we're worth 5% more a share, and we're willing to pay that price to anybody willing to sell." It's called a buyback, and as Cramer calls the "Sir Mix A Lot Corollary" he says "I like big buybacks and I cannot lie."
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Yep. That's why market orders exist and shouldn't be banned. However, they should be used carefully.
The original firestarter E-Mini sell order program did not complete. It was pulled back when its human owners realized that they were fueling the fire. It was issuing market orders too fast, and as I posted, when you issue a market sell order when all of the buy orders on the books are satisfied, you just gave what you're selling away for free. Print a quote that the S&P 500 is worth zero... and yep, buy orders will come out of the woodwork, but not at the price you want.
Correct reaction: Declare there's craziness going on. Stop trading. Force the crazy player to retract their crazy order. Then resume trading.
This reaction: Let the world go to hell. Then click undo.
The root cause was that an order to sell a security tied closely to the value of the S&P 500 throughout the day got translated as an order to sell a few billion of dollars worth of that instrument right now. They shot right through the entire buy book and that means it's a market order with no matching buy order... submit an order for a penny and you can own an option to purchase shares in the S&P 500. Oops, that can be logically extended that to say somebody thinks the entire S&P 500 just went worthless.
w
This is why we code nonsense filters. Never take user input without defining you're what expecting to get from that user and what's out of bounds. Did you know "; DROP DATABASE YourDatabaseName;" is not the name of any city in the world?
Such protections exist for the average consumer too. Try shoring a few billion worth of something, and your broker will call your local mental health authorities.
So you want Dow 1000 to have stuck?
The offending program's owner was found and punished, with regulators saying they're going to create new requirements for all such programs... just a little look before you leap logic would have saved the day.
With the phone logs compromised and the other side of the call making contradictory statements under oath, there was enough room for Stewart's defense to instill reasonable doubt on that charge so the prosecution didn't even bother trying. They did have enough clean witnesses to say she submitted a false log to an investigation, and there's the obstruction of justice crime she was convicted on.
Remember, OJ was found liable for wrongful death in the same killings while he was found not guilty in the famous criminal trial. These are not contradictory results... one jury says they had reasonable doubts, the other jury said it's more likely not he did it.
Where's your proof this fictional baby would have lost money? You're ignoring the fact there was a time period of trades that were reversed as a big click of the undo button.
Yep... and the big winners were people like Marc Cuban who realized his company being worth a billion to Yahoo! as an error (Is Yahoo! of today using any asset they got from him?) and he now teases NBA officials in a way the league doesn't allow because he can afford the fines.
The airbone baby got his stocks and money back when the SEC reversed all trades that happened during the flash crash. The real crime is that your belief in FUD is keeping you out of the market.
Humans 1, HFT code 0.
First, if the automated trading system had any sort of check that would have flagged this order for review, the flash crash would have never have happened. Yep, things that slow down bad orders are good things. This system didn't look before it leaped.
Then, if there was any sort of a "What do you think you're doing?" questioner like the NYSE used to have when it was the only option in the form of the specialists, the order would have been corrected and the flash crash would have never happened.
Third, the LRPs were ineffective because they couldn't generate enough buy orders fast enough... and they didn't serve as stopdowns because there were other places still functioning. The damage was limited because the firestarting order was killed mid-way... anything that could have slowed down its execution was a good thing that let them kill it with less damage.
Fourth, this was bad thing to put at an extreme discount. If something based on the S&P 500 is headed down-down-down... that's 500 issues where functioning systems see... hmm, I want to buy this stock, but it's cheaper to get the whole S&P 500 right now so I'll take that and get 499 stocks free. There goes the buy books on the entire S&P 500 and yeah, people will notice that.
3. Slowing down the trading on NYSE did not help but rather hurt by locking up liquidity. Shitty NYSE Arca systems that handle ETFs overloaded and further exacerbated the problems.
The reason why the NYSE slowdowns didn't help but rather hurt was because they weren't honored by the electronic exchanges, which saw sells and buys and matched them as fast as they could with no slowdown or any sort of review.
Where's Clippy when you need him? "You're about to delete hundreds of millions from you're firm's value! Are you sure you want to continue?"
It wasn't the phone company record that the call took place, it was her company record about what was discussed during the calls.
Her phone records that she presented investigators showed she had a pre-existing stop-loss order to sell the stock if it traded below $60, but others testified that was a lie fabricated after the illegal info was given to her. So, there's your obstruction. Yep, they couldn't prove the crime but could prove the cover-up.
Fire up the Wayback Machine, we're headed to March 4, 2004. Fox News, Forbes, USA Today
What was the first shoe?
You must be the Cookie Monster.
Most cookies are unique values to identify you to web sites, and therefore also to ad networks. The more info about you that can be associated with that ID, the more they can specifically target you.
The UDID might be a value that's random, but if ad networks can tie your usernames to the UDID, then they can uniquely identify your phone as you, and tie that to the targeted information.
The SEC rules are about as open source as they get... file a comment with them if you want to propose improvements.
The problem was there's similar rules for crashes of individual stocks, but those rules were only at the NYSE and not everywhere. Now they're everywhere. Problem solved.
The last accepted bid is the historical price even if it was just a few seconds ago. Where it's going next is up for debate.
The obstruction of justice was the fact she faked the phone records, therefore destroying the evidence that would have led to a conviction on insider trading.
Maybe I live in a over-ethical world, but as a programmer I feel a responsibility to tell my customers when they're risking a situation they might not like.
First, none of this involved a "bug" . All systems involved functioned as designed.
A program that runs as designed but produces a undesirable result has a "design flaw" which is a class of "bug". Such things need to be "fixed".
A LRP is a technical name for "time out" and is effectively saying "STOP TRADING! We, as market makers in this issue see that something crazy is happening here. It's changing value far too fast, either up or down, and either somebody's sending orders that don't match the rest of the world, or there's breaking news about this stock and it's only fair to wait for that news to spread. Everybody, let's come to an agreement on the value of this thing... take a look at what just happened and let's get some more orders in here. This thing is not liquid enough... and we don't want it going to infinite heights or zero unless it really deserves it."
The problem was, while orders at the NYSE were safe, there's far too many other places you can trade stocks, and they didn't stop at all. As I said before, a limitless sell order with no matching buy is an offer to give the stock away for pennies. That's an LRP situation at the NYSE, but other places just match it up with buy orders and made some people extremely lucky. That was a foul play, and the SEC busted such trades. New rule: When the NYSE rules say stop, now an SEC rule says you stop too.
Automated trading in a proper use is to things like... "Check list of bankruptcy filings. If I own something on that list, get rid of it NOW!" CNBC covered Worldcomm and Enron in a way it doesn't usually cover penny stocks because they wanted to hammer home the point to people who still had it that there was still time to get a few cents per share and that's better than riding it to zero.
Safety rules are there to prevent people from being stupid even if they want to be stupid.
It's perfectly legal for a business to say "We think we're worth 5% more a share, and we're willing to pay that price to anybody willing to sell." It's called a buyback, and as Cramer calls the "Sir Mix A Lot Corollary" he says "I like big buybacks and I cannot lie."