Another HFT Flash Crash while you were sleeping….
In this new world of technological developments, thing can only get better, or? We have written extensively on the HFT topic. The Algos are unregulated, and will eventually cause the collapse of the system. Despite regulators “assuring” us the technology is providing liquidity, we can not but disagree, as we once again see what happens when a few algos go crazy. Somehow these events are getting more frequent as time passes, or have people already forgotten about the (K)nightmare in August? India collapsed 16% while you were sleeping, but all is back to normal….From Bloomberg.
Trading in the S&P CNX Nifty (NIFTY) Index and some individual companies stopped at 9:49 a.m. in Mumbai for 15 minutes after the 50-stock measure tumbled as much as 16 percent to 4,888.20. Volumes traded on the gauge surged 163 percent compared to the 100-day average at 1:27 p.m., data compiled by Bloomberg show.
Reliance Industries Ltd., owner of the world’s largest refining complex, and Housing Development Finance Corp., the country’s biggest mortgage lender, both tumbled as much as 20 percent.
Regulators around the world are probing market structures and electronic trading after a series of glitches. In May 2010, high-frequency orders worsened the so-called flash crash, which briefly wiped $862 billion from U.S. stocks. The Nasdaq Composite Index in May this year was overwhelmed by order cancellations and trade confirmations were delayed on the first day of trading in Facebook (FB) Inc., the largest initial public offering of 2012.
“India has joined the big league with this trading disaster,” A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors Pte., which manages about $400 million, said by phone from Singapore. “It’s very surprising so many erroneous orders went through. Exchanges and regulators must be one step ahead as systems and technologies upgrade.”
Full reading here.