Stock volatility today???
Moderator: Global Moderator
Stock volatility today???
Anyone see this:
Vanguard total stock market ETF went from 60 to 40 and rebounded within an hour? Some people bought in at 40 and it went back up! What the heck happened? A computer trading system go wrong? Anyone buying in on that trade at 40 made a killing.
Vanguard total stock market ETF went from 60 to 40 and rebounded within an hour? Some people bought in at 40 and it went back up! What the heck happened? A computer trading system go wrong? Anyone buying in on that trade at 40 made a killing.
Re: Stock volatility today???
Word is a trader error.
Pretty wild.
Pretty wild.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Stock volatility today???
Heads will roll for sure if it was. Scary how a trader error could cause that to happen though. Wish I was logged into my broker to buy in with some play money. A lot of people today made some easy money.
Re: Stock volatility today???
Think of all the stops that were triggered.craigr wrote: Heads will roll for sure if it was. Scary how a trader error could cause that to happen though. Wish I was logged into my broker to buy in with some play money. A lot of people today made some easy money.
That's going to be a bunch of VERY unhappy people.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: Stock volatility today???
I don't know. If I'd gotten in at 40 I'd have been pretty happy!MediumTex wrote:Think of all the stops that were triggered.craigr wrote: Heads will roll for sure if it was. Scary how a trader error could cause that to happen though. Wish I was logged into my broker to buy in with some play money. A lot of people today made some easy money.
That's going to be a bunch of VERY unhappy people.
Re: Stock volatility today???
Well looks like some of the trades are going to be cancelled:
http://www.reuters.com/article/idUSN061 ... arketsNews
http://www.reuters.com/article/idUSN061 ... arketsNews
Probably the fairest thing to do as it looks like an error that just cascaded outwards.NEW YORK, May 6 (Reuters) - Nasdaq Operations (NDAQ.O) said it will cancel all trades executed between 2:40 p.m. to 3 p.m. showing a rise or fall of more than 60 percent from the last trade in that security at 2:40 p.m or immediately prior. Nasdaq said the stocks affected and break points will be disseminated soon.
Re: Stock volatility today???
Weeee. I was stopped out of all of my equity positions early in the day before the knife down. Very strange to see the Dow completely keel over on the chart.
When this week started my equity trading systems were long (with stops). But since things looked hairy I double checked all of the stops. I'm glad I didn't have a bunch of old stops sitting way down in that knife edge, I'm sure that was painful for many people to be sold out minutes before the snap back.
I also thought of MT's words along the lines of "when you're worried, re-balance". In my case that meant topping up on TLT a couple days ago which definitely paid off today.
When this week started my equity trading systems were long (with stops). But since things looked hairy I double checked all of the stops. I'm glad I didn't have a bunch of old stops sitting way down in that knife edge, I'm sure that was painful for many people to be sold out minutes before the snap back.
I also thought of MT's words along the lines of "when you're worried, re-balance". In my case that meant topping up on TLT a couple days ago which definitely paid off today.
Re: Stock volatility today???
Stops get me nervous about being whipsawed. Did you miss an unintentional haircut?
Last edited by craigr on Fri May 07, 2010 2:44 am, edited 1 time in total.
Re: Stock volatility today???
I think it's far more likely that a bunch of people panicked, sold out at 40, and the buyers then sold as people bought back in at 45, 50, 55, and finally 60.
While this is interesting, I didn't know about it until long after it was over. I just don't watch the stock market very fastidiously.
But given that computers make most trades, I'm betting someone programmed their robot incorrectly.
While this is interesting, I didn't know about it until long after it was over. I just don't watch the stock market very fastidiously.
But given that computers make most trades, I'm betting someone programmed their robot incorrectly.
Re: Stock volatility today???
I'm not sure about your second sentence but yes stops don't make you money in general because you usually sell at the worst possible price. I won't know if I will be 'happy' about selling out at the stops yesterday until I see what the market does next.craigr wrote: Stops get me nervous about being whipsawed. Did you miss an unintentional haircut?
From my research adding stops generally lowers my cagr, but wide stops aren't a big hit. The reason to use them is to cut off some tail risk, and to take emotion out of exit decisions.
Re: Stock volatility today???
My wife's partner was relieved of his holdings in Apple Computer last week. When I think of investing in individual equities and market timing, I am reminded of this gambling quote:macclary wrote:
I'm sure that was painful for many people to be sold out minutes before the snap back.
"Listen, here's the thing. If you can't spot the sucker in the first half hour at the table, then you ARE the sucker."
Mike McDermott (Rounders)