Tue, Oct 21, 2014
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

Banner

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: What's next for trend followers?[more]

    Bailey McCann, Opalesque New York: New research out from Ibbotson touches on a key debate happening among investors and fund managers, specifically whether long term trend followers can survive in the new

  2. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  3. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  4. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  5. Sparx optimistic about outlook for Japan[more]

    Benedicte Gravrand, Opalesque Geneva: According to SPARX, there are causes to be optimistic about the outlook for the Japanese market and the country's economy in general. Sparx Asset Management is a Tokyo-based asset manager, part of