Computer Madness

[Mpoufos]

i agree with destroyer, which of u trade bunds anyway in here. i think some of u would have a slightly different opinion if u were in the book. If u are outside the dance u can say whatever u want i guess

 

[gooseman]

mate if you were in the book then you wanted to get a fill. that's the top and bottom of it. when i was trading as a local i lost money on moves like these-that's the way it is. if you'd had a buy order in @ 114 i suspect you would be feeling differently. in thinner market conditions a massive market order like this is always possible-you don't want a fill don't put in an order. if you're long already have your stops in and take your loss.

 

[Mpoufos]

r u trading bund gooseman?

 

[gooseman]

not any more.

 

[gooseman]

well, not PA anyway. use it as a hedge sometimes.

 

[DaxDestroyer]

But equally there was a lot of stuff done on a nod and a wink despite the efforts of the pit observers. Anyone who's worked on the floor knows that. That's why they came down so hard on sports betting on quiet days on Liffe (and a few other places) - the pit observer boys tended to get taken to the cleaners by the traders and then ended up in their pockets. Heard a few tales of stuff after the 94 world cup.

If you say so sports betting I saw people losing their shirts on stupid bets

 

[davedavethetrader]

think we could well be missing the point here. if this is true, it will happen again. IT WILL HAPPEN AGAIN. I know a local who made a mil, guess what im going to be doing if it happens again! sod sitting round here talking about the ethics. im taking the money.....

good times.

 

[BSD]

Welcome to computerized trading

Brainless Computerized Trading … | Riding the DAX

Have you seen the "Bund Crash" today???

How crazy and how different from times I traded on the floor.

So always take care, where you put your stops

Hi Carlos

"""This morning someone sold a few shares of BRK-B, the B shares of the Berkshire Hathaway company, Warren Buffett’s investment empire. This itself is not extraordinary, as there are around 70,000 shares traded every day, representing about $300 million of notional value.

What makes this morning trading activity different this morning is that when that person went to sell his stock, instead of getting the quoted price of $4,448 per share, he received $2,147, about 48% of what he expected.

This happened several times this morning; all told about 50 shares of BRK-B were sold at a 52% discount. The reason this happened is that somewhere a trader put in a limit-buy order for 50 shares at $2,147, with full knowledge that the trade would likely never get filled. These types of trades are usually protective measures to prevent paying too much for a stock or selling for too little. On the off chance, however, that the day’s sell orders burn through other, higher, limit orders, and the brokers aren’t actively trading, these ‘protective’ trades can become predatory, allowing someone to buy 50 shares at a 52% discount, making $115,050 over the course of a few minutes, simply by selling them back into the market at the higher, normalized price.

*Though usually legal (technically it’s simply bid/ask arbitrage), this is a pretty unethical way to make a buck. While one can argue that the seller should have protected himself with his own limit order, at the end of the day this is essentially a legal way to steal. It’s worth noting that I’m not the one on the buy side of this trade; nor am I saying that I wouldn’t be, given the opportunity."""

Link:
How to Make $100,000 by 11am*

To me that seems downright criminal.

 

[arabianights]

It's not criminal at all as frankly the alternative for the distressed buyer or seller is dealing at an even worse price. I've benefited from plenty of stops or silly orders and I'd like to think I'm performing a valuable service by adding liquidity. Holding a position when there are no orders in the market is infinitely worse I promise you.

 

[BSD]

AN, I know you're perfectly right, but it still doesn't feel quite right does it.

Does that make sense.

;-)

Shouldn't market makers have an obligation to make a market at realistic prices in exchange markets.

EG in that example that Carlos quoted in the Dax at the beginning of this thread EUREX looked into annulating that trade.

OK, seems they eventually didn't, but that they even contemplated annulating the trade seems to be an admission that they too thought there is sthg wrong with such price extremes.

 

[arabianights]

Thing is almost everyone involved in the bund sell off seems to have been very pleased. Lots of locals happy to receive a donation from a hedge fund and a fund pleased to take some money from a bank who presumablyultimately hedged the exotic with other counterparties. Everyone a happy bunny. By the way the bund's been a lot lower than it ever got on that day...

 

[davedavethetrader]

and lets be honest, who gives a flying..... who loses money on these things. i only wish i could build a career filling them.... honour amongst theives? not in this game....

 

[portomar]

and lets be honest, who gives a flying..... who loses money on these things. i only wish i could build a career filling them.... honour amongst theives? not in this game....

:clap: :clap:

im with dave on this one, ill be looking to code metatrader to send warnings when something like this happens... just have to learn to code metatrader now...