Fri, Feb 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

May 6 'flash crash': Exchanges were on different pages - Opalesque Roundtable Boston

Friday, June 11, 2010

From Komfie Manalo, Opalesque Asia:

The so-called May 6 "flash crash" which saw the Dow Jones drop 1000 points was not a product of market manipulation or monopoly, but rather was due to the fact that "not everybody was on the same page" on that day, so said participants of the latest Opalesque Roundtable in Boston.

Alec Petro, Managing Partner at Bay Hill Capital Management, a volatility-focused, multi-strategy hedge fund based in Massachusetts with $130m in AuM, said that the May 6 incident was an example of too much information and too much velocity overwhelming liquidity, coupled by a decision by "guys like us to just turn our machines off."

"People were used to a certain level of liquidity and we made a decision at a point on that Thursday that we cannot trade reasonably in this market and went into a 'wait' mode, that created a vacuum and a certain momentum along with that. Hopefully the exchanges will unify their circuit breakers, because the circuit breakers, when they kicked in, did a good job; it is just that not everybody was on the same page with them. I do believe that this sudden withdrawal of liquidity by a group of systematic traders did affect the market," Petro said.

This sentiment was seconded by Thomas Callahan, CEO of NYSE Li......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Global Sigma captures February's long-vol trade[more]

    Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

  2. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

  3. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

    Hedge funds turn short on tech just as stock rally takes off From Newsmax.com: A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac

  4. Low volatility funds fail to protect investors[more]

    From FT.com: A number of exchange traded funds (ETFs) designed to protect investors from sharp stock market gyrations lost more money than mainstream US stocks during a sell-off this month, underperforming in precisely the conditions in which they were meant to thrive. Low volatility ETFs, lau

  5. Legal - Hedge funds fight to save M&A arbitrage strategy, Fannie Mae and Freddie Mac ruling blow to hedge funds[more]

    Hedge funds fight to save M&A arbitrage strategy From FT.com: Hedge funds which use the US courts to wring higher prices for merger and acquisition deals are fighting to save the lucrative investment strategy, after a Delaware court ruling that threatens to shut it down. Verition Partner