Tweet From Hacked AP Account Causes High Freq. Traders To Drop DOW 150 Points 314
New submitter Mike Lape writes "Stocks plunged and recovered within minutes after the hacked AP Twitter account sent out a tweet that indicated that the White House had been the victim of an explosion and that President Obama had been injured. '...the Dow Jones Industrial Average took a quick 143-point plunge, before recovering most of its losses within minutes. The three-minute plunge triggered by the tweet briefly wiped out $136.5 billion of the S&P 500 index's value, according to Reuters data. Interestingly, Tuesday has been the best day of the week for the blue-chip this year with an average return of 0.46 percent. If the index closes in the black today, it will have been up for the 15th consecutive Tuesday. The last time the Dow rose for 15 straight Tuesdays was in 1927.' An analyst said, 'That goes to show you how algorithms read headlines and create these automatic orders – you don't even have time to react as a human being.'"
First for banning HFT (Score:5, Insightful)
It serves no purpose.
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Re:First for banning HFT (Score:5, Insightful)
internet prank with stock market side effects, or intentional market disruption and subsequent gain? btw this is why I don't read tweets.
It's very revealing in what sort of morons do and base their trading upon it.
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Morons? More like millions of scripts that auto trade based on keywords.
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True, could it be the IRL equivalent of the MtGox DDoS,buy,wait,sell,repeat trick?
Finger on pulse (Score:2)
Question is, which is finger which is pulse.
Re:First for banning HFT (Score:5, Insightful)
Re:First for banning HFT (Score:5, Insightful)
But in this case, the HFT lost money while everyone else made money (those who bought at the cheaper prices). This may be a reason not to use HFT, but it's no reason to ban it.
Re:First for banning HFT (Score:5, Insightful)
That goes to show you how algorithms read headlines and create these automatic orders
No they don't. That would be the most stupid trading strategy ever imagined, you would loose your shirt in less time than you can say "Goolge translate".
What happened is that actual people reacted to the news and the trading algorithms (not necessarily HFT, but trading bots) thought they hit a pattern and amplified the movement. Nobody lost anything except the bot herders that sold at -150 because they trusted their bots. I really can't see how that "hurts productive industries and threatens the stability of the economy" as you say.
Re:First for banning HFT (Score:4, Insightful)
Headline algorithms exist and make a lot of money. They only have to be right 51% of the time to work.
Mind you, most of the algorithms work off expected vs. actual earnings, revenue, or some other such number rather than the headlines. Of course, those numbers are released first and then humans write the headlines, but still
Re:First for banning HFT (Score:5, Interesting)
My uncle-in-law retired early, and well off, by writing scripts that key off certain reports & keywords. Trades in before actual people can, then trades out after ~1/4% change.
Re:First for banning HFT (Score:4, Informative)
What happened is that actual people reacted to the news and the trading algorithms (not necessarily HFT, but trading bots) thought they hit a pattern and amplified the movement. Nobody lost anything except the bot herders that sold at -150 because they trusted their bots. I really can't see how that "hurts productive industries and threatens the stability of the economy" as you say.
I'll just leave this here. http://247wallst.com/2012/12/04/high-frequency-trading-a-grave-threat-to-the-markets-and-the-economy/ [247wallst.com]
Re:First for banning HFT (Score:5, Interesting)
We need a new exchange that only executes trades once per month. If a company is on this exchange it is not allowed to be on any other exchanges. Problem solved. If you need your money out early there is a small fee. No more flash crashes, much less speculation, invest in a company due to dividends and growth and not emotionally fabricated stock appreciation.
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Mutual funds effectively trade once a day. I hear they're quite popular. I prefer ETFs, where I can see the current price before I decide to buy or sell, but both options are available.
Re:First for banning HFT (Score:5, Interesting)
Let’s see, when France enacted their Tobin Tax, prices went down, liquidity went down, and volatility increased. And I have seen studies that argue the opposite.
I don’t think a Tobin Tax is the answer. It is often put forward by people who are suspicious of the chaotic energy of the market and of wealthy people – suspecting it is just a game of no real value. I would say that you were treating the symptoms and not the disease – expect that I am not even sure what the symptom or disease they are trying to cure.
Why not tackle the issue from the other end? For example, index long term capital gains to inflation. This would encourage investors to hold their positions for longer.
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Re:First for banning HFT (Score:5, Interesting)
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The problem isn't more regulations vs. less regulations. The problem is coherent system vs. incoherent system. You can have less regulation, but then you can't have bailouts. You can have bailouts but then you need more regulation. The problem of the recent financial collapse was that the system wasn't coherent. There was less regulation and bailouts, That's a recipe for disaster. The authoritarians blame the lack of regulations and the libertarians blame the bailouts. Neither is right or wrong. They just prefer moving to different coherent systems.
This ^^^.
F* bingo!
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I agree with this as well, but then that opens up another can of worms. You have these massive banks and generally "safe" investments for mom and pop share portfolios. They suddenly go belly up due to some badly placed trade. You have the option, let them fall flat on their face (and many nerds here would say that's the best thing to do) but the flipside is that if they do fall over completely, you aren't just punishing those bad traders, but you are punishing all the mom and pop investors. At that point, w
Re:First for banning HFT (Score:5, Insightful)
Coherence is, I'm afraid, not really an option in a democracy. Every decision is a compromise, and it's not even the same people hammering out the compromise from year to year. The best way to get coherence is to put one person in charge, but the downsides of that are well known.
We can try to design our system to be robust to the failures of democracy, though these days even that seems beyond our reach. We've grown so adept at blaming each other that even the flawed process of hammering out a compromise has become secondary to trying to get a brief moment in which to impose our will on our political enemies while they are down.
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Coherence is, I'm afraid, not really an option in a democracy
Hence the reason this country is supposed to be a Constitutional Republic.
Pure democracies suck.
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How about the Patriot Act (the most unpatriotic piece of legislation prior to Obama's NDAA), it turns banks and other financial institutions into FBI and IRS agents.
Good. If you are going to have laws and taxes, you should improve the ways of catching those who break or do not pay them.
I know your answer would be not to have the laws and taxes in the first place, but that is because you are an extreme libertarian with no concept of history, morality or real-life economics.
You want to revert to the Nineteenth Century world of a few ultra rich capitalists paying no tax and being effectively above the law, with the vast majority forced to live on starvation wages, an
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Regulations is what allows for "gambling and thievery", without regulations such behaviour would immediately be punished by the market.
Yes, and the only reason there are murders is because there are laws making it illegal to murder people.
In a pure free market you wouldn't need to make murder illegal, because the victim (or rather victim's family) would be able to sue the murderer and ruin him, therefore the logical outcome would be no more murders.
Once you abolish government, laws, regulations and taxes, mankind will revert to the pure innocence of a free market Eden. We'll have flowery meadows and rainbow skies, and rivers made of ch
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USSR had a track record too.
Of-course Madoff worked in a completely regulated environment, your point is backwards. Madoff was the product of the moral hazard created by the government, where people just assumed that gov't was all over his business, checking what's going on there, when in fact his previous ties to the government allowed him to be completely unregulated in an environment where everybody assumed he was.
That's what moral hazard does, that's what FDIC does, that's what Cyprus just went through (and will keep going through), that's how USA banking system collapsed (and was bailed out).
If I lose money with any business that is unregulated, don't worry about it, it's my money. Worry about yourself.
Err, no. Even the regulators trusted him because they knew him and thought he as a good guy so they let him skirt the regulations. A tighter regulatory regime would have forced them to audit him and then he wouldn't have been able to do what he did. That and you should note that every financial deregulation move by the government has resulted in a flurry of new shady and ill-advised deals resulting in a wave of business collapses.
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Try and start one and see how fast you are shut down because you are not complying with literally about fifty thousand regulations. It's not about one particular thing, it's about the fact of just how much you have to comply with before you can run your exchange. Obviously it does not do anything to make exchanges 'more safe' for anybody, what it does it prevents you from competing in that market.
Similarly, there are evil government regulations that prevent you from setting yourself up as a doctor, engineer, architect or lawyer without any qualifications. What a terrible intrusion on the free market.
No doubt you're a qualified doctor, engineer and lawyer as well as Financial Colossus and so could do all of those jobs with one hand tied behind your back. Meanwhile, in the real world, I like to know that if you build me a house or take my appendix out you have some idea of how to do it, and that I
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Re:First for banning HFT (Score:5, Insightful)
And it probably does do that... but the stabilization is probably offset entirely by the strategies that the HFT algorithms use. In short, many of them are playing a meta-game of "this line will do that because lines usually do these things", as opposed to: "this looks like a good investment because it has good revenue and solid assets".
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A company that is doing well is not necessarily a good investment, especially if everyone already "knows" it's a good investment. Good investments are companies that are undervalued. They can even be terribly managed companies that are just not as terrible as people think. There are many strong companies out there who's share price is severely inflated and therefore very bad investments.
Everyone can see for themselves how different computer algorithms and different humans investment strategies compare bu
Re:First for banning HFT (Score:5, Funny)
Also, they aren't pissing on your leg- they're adding to your leg's liquidity.
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So that's why I didn't get their definition of liquidity, I was thinking in financial terms!
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You're apparently out of the loop. HFT stabilizes the market by adding liquidity, or so we're told.
That's just a rumor. Just like the preposterous idea that anyone really understands any of it.
Wonderful bit about how the past Fed. Chairmen haven't had a clue about it and how in the 1970's the markets only moved a million shares in a week, but now do it in a matter of seconds. Quite a lot of it is like watching a flock of birds darting this way and that. It's a current of stock trades, maybe it obeys something like Ohm's Law.
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This is not what I have been told. I have been told that it makes the market more efficient by squeezing the bid/ask spread. This allows people to execute trades faster and cheaper than before. However, this comes at the price of increased volatility. (There is some proof of this – but trying to pull out the effect of HFT against all of the other factors is hard.)
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HFT is basically betting on race horses with incredibly fast horses. When this headline hits the news, that number will go up/down and hence we have to buy/sell.
Incidentally, it does indeed do what the HFT algos predict. Self fulfilling prophecy. When HFT algos predict that the value will go up and buy, the value will go up...
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Also known as a positive feedback loop.
Exactly, put a gambling tax on it (Score:5, Interesting)
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I don't think you understand the timeframe of HFT.
It's subseconds. Not days.
Re:Exactly, put a gambling tax on it (Score:5, Insightful)
So, basically, what your saying is "I don't understand most of how the market works, so please ban everything I don't understand." Your post reminds me strongly of a senator writing about copyright on the Internet.
Wow! (Score:5, Insightful)
You know, twenty five years ago, everyone was convinced it would be computers built by the military-industrial complex that would become self-aware and take out the human race. Now I'm beginning to wonder if HFT algorithms will be the ones that do it.
Re:Wow! (Score:5, Funny)
If they are this easy to fool then we have little to fear.
Re:Wow! (Score:5, Insightful)
Here's the rub. For someone like me, I couldn't care less about HFT. I am in it for the long haul. I've invested for almost all of my adult life. I don't invest on hunches, instead I buy broadly and then hold for a long time. My investments do about as well as the broad market and I have almost no trading costs. Even if some doofus thinks he can beat the market (no, they can't), he'll eat up 1-2% of his money on fees.
So let folks be stupid and market time and talk about dead cat bounces and triple witching hours and other mumbo jumbo. In the long-run I will beat the vast majority and I will do so with very little effort on my part.
The reality is the only investors who can beat my strategy are active investors who are involved in the management of the assets they own (like Buffett) and those with insider information (real insidr info, not what your brother in law told you at the cocktail party). So, let the market tank for a couple hours, a couple days or even a couple years. I couldn't care less.
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Maybe you should know that the big banks who do HFT also co-locate inside the exchanges and front run orders making hundreds of billions per year.
Also, you might want to know that if the market crashes and restarts like today the big banks can get their losing trades reversed and you can't.
All the profit they're making has to come from somewhere. Are you so certain it doesn't come out of your pocket?
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Can you please cite a source?
Re:Wow! (Score:4, Interesting)
Here ya go. That wasn't hard.
http://www.globalresearch.ca/computerized-front-running-and-financial-fraud/18809
http://247wallst.com/2012/12/04/high-frequency-trading-a-grave-threat-to-the-markets-and-the-economy/
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The money might be coming out of the pockets of other investors. It also might be coming from efficiency that HFT enables, The economy is not a zero sum game. Efficient allocation of resources leads to less waste and more total wealth. I am not saying that their gains are not to the detriment of others, I am just saying that they aren't necessarily. Also, nobody is forced to invest in the NYSE. They only people getting screwed are people who signed up.
Anyone who thinks the stock market isn't gambling
Re:Wow! (Score:4, Insightful)
"The money might be coming out of the pockets of other investors. It also might be coming from efficiency that HFT enables"
I don't know that I'd call it "efficiency". Ease, maybe. Not the same thing.
"Efficient allocation of resources leads to less waste and more total wealth."
Show me where HFT leads to efficient of allocation of resources. I do not agree at all.
Trading in goods leads to efficient allocation of resources. But HFT today happens FAR too fast to have much impact on physical goods or manufacturing. It's only "efficient allocation of resources" if you consider numbers in a computer to be resources.
And in exchange, as this event demonstrates, we have to contend with dangerous and unhealthy volatility.
The Stock Market was intended to "efficiently allocate resources" when stocks represented actual investment in actual goods and services. Today, as often as not they are just derivatives being shuffled around, which don't much affect "resources" other than cash in somebody's pocketbook.
It's hardly anything anymore but a big casino. And even worse, with HFT it isn't successful companies that gain or lose, it's whoever can place his bet first. People who think that makes for a healthy market are off their nut.
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You couldn't care less...
Maybe you should know that the big banks who do HFT also co-locate inside the exchanges and front run orders making hundreds of billions per year.
Also, you might want to know that if the market crashes and restarts like today the big banks can get their losing trades reversed and you can't.
All the profit they're making has to come from somewhere. Are you so certain it doesn't come out of your pocket?
Profits are not finite, or more precisely, bound in such a manner that forces someone's win to match someone's losses.
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Profits are not finite, or more precisely, bound in such a manner that forces someone's win to match someone's losses.
Don't be silly. Profits are bounded by the value of good and services produced. That is to say, they're bounded by the economy. The value of goods and services produced is finite -- you can only produce so much in one day -- so is the gross revenue, and therefore so are the net profits. Even in the digital world where you could theoretically produce quadrillions of digital licenses of valuable software at the same price, the money supply limits you. You couldn't sell 5 quadrillion licenses for WinRAR s
Re:Wow! (Score:5, Insightful)
Maybe you should know that the big banks who do HFT also co-locate inside the exchanges and front run orders making hundreds of billions per year.
That's very nice that those banks are making money. Front running is illegal already. This practice may affect my purchase prices by a couple pennies if true. That is miniscule compared to the gains realized over holding a good investment long term.
Also, you might want to know that if the market crashes and restarts like today the big banks can get their losing trades reversed and you can't.
If I'm a long term investor, I generally have no trades on a given day, therefore, I have no trading loses to reverse. If I were going to trade an investment, I would have established what I believe the value to be. If the market went awry like today and the prices where not what I thought the values were, I WOULD NOT TRADE DURING A PANIC.
All the profit they're making has to come from somewhere. Are you so certain it doesn't come out of your pocket?
The profit of every company and individual has to come from somewhere. Why would I assume it's at my expense with no evidence that it is?
Re:Wow! (Score:5, Informative)
I will point out something to buy and hold investors
The Bid / Ask spread has dropped by 90% in the past 30 years. You used to pay .5% to 2% for each trade – not it basically nothing. Moving to decimalization helped, but it is the HFT that really collapsed the spread. This is even truer for ETFs then for normal stock.
The fees that mutual funds and ETFs (which a lot of buy and hold investors hold) have also collapsed the past 30 years. Specifically for index funds, they have fallen by 90%. There are a lot of reasons for this, but about a quarter to a third is lower trading costs, which can be traced backed to HFT.
So, you save about 1% to get into a investment, and about .25% each year if that investment is a mutual fund.
Lower transaction costs, but you're still screwed! (Score:2)
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timing your sale for the time of day they want to say it occurred so that you get the lowest possible price and timing your purchase for the time of day so that you get the highest possible price.
My broker offers me a 2-second execution guarantee on most trades. Maybe you should look into that.
The big brokers, as market makers, can game your transactions so as to make themselves, as market makers, the most amount of money and still be able to say with a straight face that "they carried out your transaction as you requested".
I see my trades work as expected - if the bid or ask displayed is bigger than my transaction, I get that price or better. If the market is thin I'll use a limit or stop order to make sure I don't get burned. It's good to pay attention to this stuff when trading, but really it's not like a broker is going to cheat his customers without it getting noticed.
They can also play on the "dark markets" where bigger transactions and movements occur, so that the rest of the market and the little schmoes never really see the momentum of the full market.
The best scam of the past few decades was conning a co
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Whew! I am relieved! For a second there I was under the impression that the price little guys pay for stock doesn't reflect these shenanigans. Thanks for clearing that up!
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edit: that second "sellers" should have been buyers.
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The market is not supposed to be "fair" in the sense that we should all profit the same amount. The market is fair in that people play by the same rules. If you think HFT is easy money, then you can invest in a company that does it and be guaranteed immense profit.
HFT doesn't necessarily remove value from the market. This assumes that the market's value is static. Yes they are making money, but they are also crunching a bunch of numbers constantly and causing the prices of stocks to quickly converge to
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Everyone? Wow, are you from another planet? The only ones I know who thought that were a bunch of geeks who watched too much TV in their formative years.
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As long as they stay as dumb as the average broker and just act on pavlovian reflexes, we should be safe.
Was this really HFT (Score:3)
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The summary said it was the algorithms.
Then whoever is programming these HFT algorithms should be shot. Having them susceptible to tweets is just ridiculous speculation.
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I don't believe that computers are yet capable of parsing that tweet and recognizing that its content is extraordinary (as opposed to the usual tweets that come from that account and others).
I don't know, I could see it. Set up a rule that any tweet containing the words "explosion" and "white house" in close proximity raise a flag. Bonus points for "Obama" and "Injured" close to each other.
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I think the words "explosion" "white house" "obama" and "injured" together in a tweet from a major news organization would qualify as extraordinary.
Don't get me wrong - I know what you're saying, and anyone who would set up a system to automatically trade based on an algorithm like that is a fucking idiot.
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I can see it being sent to someone's screen in flashing red characters who then only has to press a button that says "ignore" or "Sell, sell, sell!"
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What the hell does bombing have to do with economy? Care to explain that?
You wanna tell me people stop buying stuff if something somewhere goes boom?
Get rich quick scheme? (Score:5, Interesting)
I almost wonder if it was deliberately done to make a quick buck off a short sell. Sell high, make everyone panic, buy low.
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I almost wonder if it was deliberately done to make a quick buck off a short sell.
I would assume so. The question is whether the people behind it had enough money available to make a big profit. The drop was only about 2%, so if you had $10 million to invest, you'd only make $200K if you timed it perfectly. Realistically, $50K to $100K. Not worth it.
Comment removed (Score:5, Interesting)
Gosh! (Score:5, Funny)
I sure am glad that, unlike crazy neckbeard stuff like bitcoins, Serious Professional economic instruments don't suffer hilariously baseless volatility because some goofy website got hacked...
That would, like, reduce my confidence in the rationality of the market.
Here's the thing (Score:5, Insightful)
Bitcoin moves like a stock (a thinly traded one at that), not like a currency. You are making false equivalence here. This caused a 1% drop in stocks for a couple minutes. Bitcoin has a bid-ask spread higher than 1%. The US Dollar didn't move at all based on this, and indeed changes in value around 2-3% per year.
The criticism of Bitcoin's volatility is highly valid when it wants to be a currency. I wouldn't use stocks as a currency due to their volatility either.
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I think you're confusing the stock market with arguments about the stability of the value of the US dollar vs stability of the value of a Bitcoin. Stock prices have always been volatile and subject to the panicked reaction of idiots whenever there's bad news.
Forget HFT (Score:2)
Our idiot overlords (Score:3)
What kind of trader sells on an uncorroborated news story about the President being shot? It takes all of thirty seconds to see if anyone else is reporting the story.
I understand that they're trying to front-run the many big investors that are getting information in advance, and the high-frequency trading algorithms, but the willingness to hit the dump button on a sole report is just dumb.
The problem is the damage they do to everyone else. Otherwise, I'd say they deserve to lose.
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How did that do any damage to anyone other than idiots? If you had been smart, you'd have a buy order in place ready to buy if the market dipped enough. Then you would have made 1% today without even paying attention.
Seems to me like this was an entirely deserved shot in the foot to anyone who suffered from it.
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Because a huge number of investors are people with retirement accounts, index funds, etc. They're not sitting at a computer watching the market because they're too busy working for a living. They have 401ks with market exposure because money gets 0% in the bank.
I don't give a shit about day traders. Like you say, they'd have option spreads on to protect from a sudden drop, and if not, screw them for being dopes. But there are a lot more people who a
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Because a huge number of investors are people with retirement accounts, index funds, etc. They're not sitting at a computer watching the market because they're too busy working for a living. They have 401ks with market exposure because money gets 0% in the bank.
If they didn't respond to the drop, they weren't affected. The market dropped and rose again within a few minutes.
Only the people who sold in response to the tweet or the drop caused by it, lost money. Doing nothing didn't hurt anybody.
(I guess some people might have stop loss orders that would have been triggered, but I'd say today illustrates why those are stupid.)
Re:Our idiot overlords (Score:4, Informative)
You probably know that mutual fund movements happen at the end of trading.
Someone who saw the precipitous drop and hit the panic button on their mutual fund (say, a retiree or soon-to-be retiree) would have lost, but good.
A lot is made of the notion that mom and pop should be in the market. It's been a hallmark of the past decades that the market is where retirees should put their money, and current Fed policy almost forces it. Fact is, small investors are shark food in today's environment. The days of being able to see who's doing the buying and selling are over.
I wonder if we'll ever find out what kind of trades were made by whomever manipulated the market today. The person who hacked the account and tweeted out that story could easily have netted 7-8 figures, unless it was not an individual, but a larger entity, in which case it could have easily been ten figures- on the dip and again on the rip.
It doesn't help that while the Boston Marathon bombings were dominating the news, congress saw fit to gut that bill they passed around the election that outlawed congressional insider trading. Suddenly, on "security grounds" lawmakers and their staff can again trade on the knowledge of bills that are about to be passed (or not).
I'm old enough to have heard Milton Friedman speak in person, on the campus where I used to teach (not business or economics, don't worry). I remember him saying that insider trading should be completely allowed, but only because back then you could actually see who was on both ends of a trade. Today, it is no longer possible to know who's trading what. All transparency is out of the market. That one fact does more damage to the so-called "free market" than any "socialist" policies coming from the administration.
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30 seconds? You have a faint idea how long 30 seconds are in HFT?
If you want to get a feel of just how endlessly long those 30 seconds are, start developing firmware for microcontrollers. Then look at a second, and ponder just how much stuff you can do in that time. Now you know what 30 seconds is to them (since even with all the coke they're not even close to being clocked at 100+ MHz).
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In HFT, nobody is pressing a button. That's why they call it HFT.
The people who sold on this news report were human beings, making decisions based on a single uncorroborated news report of massive import. The sellers were not HFT-bots.
Brilliant! (Score:2)
1927 + 2 = 1929 (Score:4, Interesting)
"The last time the Dow rose for 15 straight Tuesdays was in 1927."
And two years later it crashed.
What they don't mention... (Score:2)
They're big on blaming high frequency traders when the market drops in 3 minutes on bogus news.
They're not so big on crediting high frequency traders when the market recovers in 3 minutes when the news is recognized to be bogus.
I guess it was the army of Wilford Brimleys in bow ties and green eyeshades that did that.
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If the money didn't change hands after all was said and done, fine, but there is a winner and a loser on each trade. Given how much the market affects pensions, municipal finances and the economy on the whole, just because the total value recovered, doesn't mean those caught selling on the way down weren't devastated.
Re:What they don't mention... (Score:4, Funny)
You sound like a programmer who wants to get some pat on the back for spending his weekend fixing the dumb error he made that nixed a week of work.
Retirement account (Score:3)
Damn the almost-perfect timing of my retirement account contribution this month!
Thanks. (Score:5, Insightful)
I want to thank the stock market, once again, for fucking, I mean speculating with my, no, our economy.
Traders don't give a shit. The man in the street gets fired because stock prices need to go up and up and up and then - oh surprise - they crash.
My world can do without stock market.
aha! (Score:3)
"Stocks plunged and recovered within minutes"
See? The system works.
</sarcasm>
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When a large portion of the country is taking risks big or small, lose on those risks, and proceed to tank the economy. It hurts even those who did not take risks. Not everyone understands the repercussions of their risks. You should care about negligent risk takers.
So, what is the percentage of the economy that was directly/substantially afflicted by this brief fluctuation on the stock market?
Easy come easy go... (Score:5, Funny)
sell sell sell
NASA reports asteroid on collision course for earth expected to "obliterate" housing market.
sell sell sell
Gold prices expected to reach a 20 year low as Lord Ganesh spotted on Indian TV favoring peanuts over gold.
sell sell sell
Acme Toothpick Company announces it will be laying off 1 million workers as the last tree in the amazon rain forest is cut down.
sell sell sell
North Korea launches devastating nuclear attack against giant sea turtles invading its territorial waters. Fears of radioactive fish expected to have catastrophic effects on east Asian seafood markets.
sell sell sell
Quote (Score:2)
October: this is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February.
Why did it even matter (Score:3)
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So I wasn't the only one pondering how it's probably not such a good sign when the current situation is similar to the one just at the evening of the great depression?
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The response to this "best troll / hack" will be a global manhunt for the tweeter, increased anti-hack protection for HFT systems, and complete ignorance of the real cure for this mess. (That, of course, would be the end of HFT and of trading-algorithms that rely on Twitter, now more than ever the easy-to-0wn InterNIC [wikipedia.org] of social media. twttr's intruders might not get root, but this event proves a popular news service is close enough.)
Re:Where do we start? (Score:4, Informative)
1. Government spending as a percentage of GDP has been dropping since 2009. Some would say this is why the current recovery is so anemic. This issue is being addressed.
2. Arbitrage does not suck money from slower traders. It sucks money out of price differences across exchanges thereby reducing spreads. For an average Joe trader it's much more likely that having good arbitrage is going to be a benefit. Strong markets must have efficient price discovery and arbitrage.
3. The bulk of the people in the current system who do not pay income taxes are either retired or have incomes in the lower quintile. If you want to get people to have more skin in the game the way to do it is by having a broader income distribution; not by making the tax system more regressive. The US has a horrible income distribution pattern, one of the worst in the world, and it is getting worse. To get an idea of how severe this problem is, in 1980 the top 1% in the US collected 10% of the income. In 2010 the top 1% collected 24% of the income. The general population cannot possibly have skin in the game with this atrocious economic structure.