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Meet Today's Berserk HFT Algo-Driven Flash Crash: Magnum Hunter Resources

Submitted by Tyler Durden on 01/19/2011 11:16 -0400

Today's flash crash du jour comes to you courtesy of Magnum Hunter Corporation (MHR), which in the span of a few tick lost half its $500 million market cap. Unlike most other such HFT triggered events, there was actionable news, after the company announced it would acquire NuLoch Resources, yet still the fact that a selling algo can take out virtually the entire orderbook half way down to zero would once be considered at least modestly surprising. Not so much anymore.

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Wed, 01/19/2011 - 11:19 | 886995 Ancona

Why does this not surprise me?

If we were to force participation in the market with humans only, then require a bid to be held for at least one minute, the bullshit would probably stop.

Wed, 01/19/2011 - 11:24 | 887006 Ragnarok

Hell, updating every 2 seconds would do it.

Wed, 01/19/2011 - 11:27 | 887009 SheepDog-One

Ancona imagine if there was one SIMPLE REASONABLE rule on Wall St that all market orders must first have a Captcha answered correctly before the trade is executed? DOW 2,000 is what we'd have! At best!

Wed, 01/19/2011 - 11:56 | 887087 Ancona

+10

I shuld have thought of that!

Wed, 01/19/2011 - 12:12 | 887142 Willzyx

+100

With math questions

Wed, 01/19/2011 - 11:19 | 886999 Cdad

Sweet! I love flash crashes. One of my favorite subjects. Been watching them for years...since the summer of 2007, I think. I don't think that Mary Shapiro talks about them much, however, as she relentlessly meets with criminal syndicate Wall Street bankers about SEC laws they think she should just forget about...which is too bad, of course.

Dog...let's light this crap candle!!

Wed, 01/19/2011 - 11:23 | 887004 SheepDog-One

SEC rules? Fuggedaboudit! Crap candle indeed, burning at both ends!

Wed, 01/19/2011 - 11:25 | 887007 doomandbloom

i need a HFT program that can buy such dips...

Wed, 01/19/2011 - 11:33 | 887020 dan10400

Those just get reversed. No economic value.

Wed, 01/19/2011 - 11:25 | 887008 AccreditedEYE

Nothing to see here but pure, transparent orderly markets helping capitalism and capital formation across the nation. Seriously though, I can't wait to see the 'bots break the indicies when some "event" or news article flips them out....

Wed, 01/19/2011 - 11:32 | 887019 SheepDog-One

Bit of a 30 point flashcrash on the DOW as well!
Just imagine this market if all trades had to have a CAPTCHA answered correctly before the trade is executed...what do you guess the DOW would be? My guess is around 2,000 range.

Wed, 01/19/2011 - 11:36 | 887021 Mercury

Oh my God!....oh sorry!...do over, do over!

I'm gonna need everybody to put their money/shares back where they were before 9:45 mmmmkay?

Wed, 01/19/2011 - 11:39 | 887036 SheepDog-One

And with all this BS daily, theyre surprised that the retail investor has long ago left Dodge City, never to return! Gee I wonder why!

Wed, 01/19/2011 - 11:34 | 887022 Hephasteus

I see their problem. Too many fucking corrupt midgets in their linked list.

Wed, 01/19/2011 - 11:45 | 887058 topcallingtroll

Yes and they are all led by the demon midget GG. St. vincent warned us about them in his holy denunciation of the 47 demons of finance.

Wed, 01/19/2011 - 11:44 | 887025 whatz that smell

gotta love the baby. must be the new "fat finger" algorithm, the one guaranteed to gun all stops.

the chartist and technicians need to update their textbooks.... this pattern will henceforth be dubbed the "berserker".

Wed, 01/19/2011 - 11:35 | 887026 johngaltfla

It's contained.

Wed, 01/19/2011 - 11:38 | 887031 Ripshod Righteous

How can we actually be sure this is a flash crash and not a data error? Sometimes the exchanges send out bad data and sometimes BBG parses a bad number here and there. I don't necessarily trust that this was a flash crash unless BBG and the exchange confirms the data is correct.

Wed, 01/19/2011 - 11:40 | 887040 SheepDog-One

Right! And they wonder why retail investor wont touch any of it with a dime taped to the end of a 20 foot pole!

Wed, 01/19/2011 - 11:39 | 887038 Sudden Debt

Just made 20% on my BAC put warrants :)

http://www.boursorama.com/cours.phtml?symbole=1rPK436B

KEEP IT COMMING!!

Wed, 01/19/2011 - 11:43 | 887046 SheepDog-One

GS revenues down over 50%, stock barely down half a tick...and theyre shocked and stunned that the retail investor is long gone!

Wed, 01/19/2011 - 11:40 | 887041 RobotTrader

Hilarious....

That is why I ONLY trade big cap SPY stocks.

Somebody at Goldman Sachs "made their year" off the backs of one of their biggest clients.

It's "catch up" time for Goldman, after those miserable earnings.

Wed, 01/19/2011 - 11:45 | 887050 SheepDog-One

Oh really? And here I thought it was because youre such a douche nozzle!

Wed, 01/19/2011 - 11:47 | 887064 whatz that smell

a catfish faced douche nozzle...

Wed, 01/19/2011 - 11:49 | 887069 SheepDog-One

Catfish faced as well! Hey Robo whats up with gold...can you do some more posts about it please?

Wed, 01/19/2011 - 13:51 | 887361 AccreditedEYE

Robo, bro.... do you think you are safe because you are trading LARGE caps? Do you remember the flash crash? When HFT Algo's run the market, bidless is bidless I don't care what the market capitalization is. The computers are firmly in control, don't think you can hide man.

Wed, 01/19/2011 - 11:41 | 887045 goldmiddelfinger

I own the stock and didn't even notice it until this article!!

Bakken Playa

Wed, 01/19/2011 - 11:51 | 887076 Oh regional Indian

More systemic "leaks". funny as it might be at one level and hopefully the good folks at the SE will reverse the trades, but these are all signs. What was the flash crash number for last year? Something big, I remember reading right here.

Look at the big picture: Flash Crashes, Metals Manipulation Exposure, FBI investigations, swiss Account Wikidribbles, food riots, floods, earthquakes, random killings...

All symptoms of a system coming apart at the seams, at every level.

Definitely smells like something big as we enter Aquarius. With full moon in cancer, more watery troubles...

ORI

http://aadivaahan.wordpress.com/2010/10/18/an-opportunity-and-a-golden-w...

Thu, 01/20/2011 - 07:02 | 889463 Hephasteus

Ya. Some of those moon cycles were intense as shit during the final saturn oppose uranus. We haven't had any really intense moon cycles for a while but this one seems like a whopper. What's interesting though about it is pluto's in cancer are able to silently and stealthily inject a negative mood directly into the environment. In people this is done through the sacral chakra. That always sort of freaked me out because sacral chakra is feminine chakra so it's supposed to be receptive. The first time I experienced this I was like what the fluck? Because the energy was mars energy and it was pathwaying through to the environment through a place it shouldn't be able to get out.

So the moon cycles are a link to the ghost region and new moons are where you clear out. In other words the full moon cycle dumps from ghost region to phsycial plane during that period and then we are supposed to react to what is dumped and return our reactions through the new moon cycle. And emotional containment is associated with cancer. Pisces/virgo has no discernable barriers on emotional containment but cancer does. Not to extent of scorpio/taurus which is the opposite end of the spectrum. Cancer/capricorn lie in the middle of the extremes between containment and uncontained.

If all the bullying and abusing is finally being disintegrated and the ghost region is losing it's monopolization of focus then this moon cycle could be a big gush of "leakage". Normally under the control of plutocracy and scorpionic forces keeps it's opposition taurus from flapping it's lower jaw and the taurus owned throat chakra. Since taurus isn't really interest in expressing other owned truths or perceptions only interested in expressing MY TRUTH and MY PERCEPTION under the rules of I possess.

This could have two effects. Assholes coming clean and blurting out the truth and uncontrolled non-assholes finally speaking up.

I know indian sauce is a bit different but hopefully you get what I'm saying and that I'm talking about the individual archetype stages within the person not just peoples signs or house placements. So it's really a crab and bull and scorpion fight if people can express what they OWN and truley understand under a massive dump of dissaproval. My guess is powers that be are gonna lay down thier shitty ass truth and set off a gore fest.

http://www.youtube.com/watch?v=g7-EaF9628M

Wed, 01/19/2011 - 11:52 | 887078 Lone Mad Minute...