Sudden 9% drop in Apple stock triggers temporary trading halt [u]
Update: The culprit of the AAPL stock price drop has been linked to volatility caused by three erroneous trades from BATS' systems. BATS Global Markets Chief Executive Joe Ratterman announced that he was withdrawing his company's IPO after Friday's fiasco. The original price for the 6.3 million share IPO was set between $16 and $18 a share, but the stock ended the day down 99.76 percent to finish at $0.04. Apple shares leveled out and finished the trading day at $596.05, down 0.55 percent.
Just before 11 a.m., AAPL plunged to $542.80, down more than 9 percent in what The Wall Street Journal said was likely an accidental "fat-finger trade." Five minutes later, trading resumed at a price just under $600.
The temporary halt was triggered by orders placed through the BATS Global Markets, which were well below where Apple had previously been trading. Orders first came in at $551.66 and quickly dropped to $542.80.
BATS has been facing technical issues, as its website notes it is "actively investigating an issue." Issues in the exchange have apparently applied to symbols ranging from 'A' to 'BF.'
BATS relies on high-speed traders as its key clients, catering to trading firms that capitalize on nanosecond price changes. Coincidentally, on Friday the Journal revealed that the SEC has initiated a probe into rapid-fire trade firms, prompted by the "flash crash" of May 2010 when stocks fell and rebounded sharply within minutes.
65 Comments
I sincerely hope this was an accident!
Or the dividend payment doesn't come fast enough.
That leads to my other explanation; one or some of hedge fund who owns the stock need cash, cold hard cash, very fast. And they sold a large chunk of AAPL to get it.
I wonder what happen across the Atlantic that they will need money for? Or maybe somewhere in the U.S.?
If your profitability depends on how near your servers are to the exchange's servers (so you beat the other high speed traders to the punch) then this is no longer the type of trading the exchanges were designed for.
These trading programs cheat by placing orders, taking a peak at the offers, then because they are fast enough, to cancel the orders in a blink of an eye if the price isn't right before the buy is executed. Or something to that effect. Conceptually, it's insider trading because you are privy to information that manual traders can't even take a glimpse at.
And guess who's one of the biggest innovators, if no the biggest, in this type of trading? Yes! That giant vampire squid sucking on the face of humanity, Goldman Sachs.
Whenever evil is being perpetrated in the financial world, Goldman Sachs is right smack in the middle of it.
"The End-Time is Here - 2008 was God's last warning, 2012 is economic collapse & WW III"
Rather ironic Google Ad to place on this thread.
I hope the world doesn't end before the Olympics and the iPhone 5
In other news Apple investors set the world record for the number of people exclaiming "Oh shit!" at the same time.