Apple Flash Crash: Stock Halted After Trade Causes 9% Plunge
Shares of Apple, the world's most valuable company, plunged 9 percent on a single trade, causing it to be halted by the single stock circuit breaker rule because of volatility.
A single trade of 100 shares at a price of $542.80 hit the tape at 10:57 coming from the BATS Exchange. The previous trade seconds earlier was at a price of $598.26.
"It looks like a fat finger mistake," said Joe Terranova, chief market strategist for Virtus Investment Partners.
But there could be other factors involved. Nine minutes before the way out of market trade took place, BATS sent an alert stating, "Please be advised that BATS is currently investigating system issues trading in symbols range A through BF."
L'episodio viene proprio al momento giusto: proprio in questi giorni si sta svolgendo l'I.P.O. di BATS ma la S.E.C. ha annunciato di voler capire un po' meglio cosa sta succedendo nel mondo dell'HFT:
Federal securities regulators are examining whether some sophisticated, rapid-fire trading firms have used their close links to computerized stock exchanges to gain an unfair advantage over other investors, people familiar with the matter say.
The wide-ranging probe, being handled by the enforcement staff of the Securities and Exchange Commission, is focusing on the computer-driven trading platforms of exchanges, including BATS Global Markets Inc., the people said.
The SEC probe illustrates a bigger push by regulators to examine less-transparent parts of the securities markets, such as the fast-growing area of so-called high-frequency trading. High-speed trading firms use powerful computer systems for rapid-fire trades, in which they often hold stocks for only fractions of seconds. They benefit by being able to move quicker than less technologically proficient investors.
Computer-driven exchanges operated by firms such as BATS are the favored venue of high-speed trading firms. BATS has moved up to third in U.S. share-trading volume behind exchanges run by NYSE Euronext and Nasdaq OMX Group Inc., with about 11% of average daily volume.
BATS declined to comment.
The SEC probe stems partly from a broad look at computer trading that regulators initiated after the "flash crash" in May 2010, when stocks fell and rebounded sharply within minutes, following glitches in computer-trading systems.
As part of this effort, the SEC is looking at communications between exchanges and high-frequency trading firms. Investigators are examining whether firms collude to limit competition or manipulate markets, according to a person familiar with the matter.