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Artistic Algo Paints Smiley Face While Crashing Stock From $10 To $0 In Milliseconds
In a mere 3 seconds, Qualys, a $350mm market cap company providing IT security solutions, was rendered worthless by a rogue algorithm with an apparent sense of humor. The stock opened around $11 but at 0935ET, Johnny 5 decided it was time for the take-down and almost instantaneously the stock, QLYS, crashed to $0. Seven seconds later, all was well in the world of IT security solutions once again as $11 was recovered. Of course, in the meantime, every stop was triggered and any belief in the stability of the market was destroyed - but hey, the exchanges got their data fees.
This is the high-speed casino that your retirements are 'invested' in...
Source: Nanex
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If only the SEC had a pair of eyeballs.
They do. But they're glued to the screen watching their Brazzers account.
Really? Cool! Let's send the bang-bus over there to evacuate them. Getting rid of those dorks would be a fairly good start ...
wall street has just turned into wall-e
"I didn't know we have a pool!"
you must be an idiot to use stop limits nowadays...
It's an old trick... We used to take out the stops first before we ran them up... that's how you get enough stock to make it worth your while... It's AMMO... muppets get taken out lower, panic when they see the runup, and rush in to buy again... real Sellers get out higher... And now you've got some of your own stock. Cha Ching... Wash , Rinse , Repeat... And record your quarterly bonus...
And the algos do this to nearly every stock, every day. I've been stopped out of a $60 stock at $14 - no trades, they just run the bid down to zero and back up in under a second and sell all the stuff they pull in a few seconds later. You can't place stops, doesn't matter how low they are, they'll get hit.
rsbr.....after that are you still in there?...or did you get off the tracks..
"And the algos do this to nearly every stock, every day. I've been stopped out of a $60 stock at $14"
THEN
WHY
DO
IT?
The NYSE used to require that a stock actually trade at the stop before it would be triggered. Nowadays, it's just the bid that has to hit the stop. Ah, the good old days. I switched to mental stops some time ago. Get burned every now and then, but over a longer time frame, I come out ahead. Seems to me that there has been much more, much deeper "stop seeking" on a regular basis since the GFC.
Since when did Bitcoin become traded on the NYSE?
Looks more like a pressure cooker to me.
Smiley face???? Looks more like a ball sack
if you turn it upside down it looks like bart chilton's hairdo
A very dark one...
If BTFD, you are smiles too!
If you had a buy order set at $0.01, and it happened to execute during that 1000 millisecond window of opportunity, congratulations, you just got a 10,000% return on investment in under 10 seconds. Too bad orders are not executed FIFO.
If you are name Jamie Dimon or Lloyd Blankfein, order is execute. If you are name Matt or Boris, stock exchange is reverse trade. Welcome to jungle!
People placing the stop losses orders are the one creating this problem in the first place. They create a situation where one benefit from crashing the stock price and grabbing all these out-of-price transactions, and then waiting for liquidity to comes back. Stop using stop loss orders, they are the idiotic trades.
But TD Ameritrade gave me 250 FREE TRADES when I opened the account & it's sunny out today & I wanted to shank 7 irons on the driving range...
So you'd suggest buying calls or puts instead as a hedge? That will effectively increase trading costs.
No, not I am not suggesting options either. You see, if I am a big option underwriter and option expiry comes, I will if it's my interest crush the spot price to make the options expire worthless and cover the day after. There's isn't miracle solutions here, but I can think of using a stop loss order that is based on a weighted volume average instead of the last price if a stop loss is absolutely required. The only order type that guarantee you are free from market price manipulation is a limit order. One could also consider a stop limit order (a limit order that becomes valid after a certain condition is met).
Once people just say no to stops the algos won't bring the price back up. The algos see your money and lust for it.
"No disassembllllle! Stephanieeeee!" - Johnny 5
They're not the shy wallflowers they used to be, content to merely knock a stock down 5%.... http://www.youtube.com/watch?v=3px-E2kSR-U
People need to co-locate and get their orders in under 10 milliseconds. Or stop participating in a market where a stock can be crashed and rebounded in under a minute, intentionally, and no one blinks an eye.
CRASH THE SYSTEM - don't play what so ever, pull your fiat go to physical and watch the algos die in a vaccum
IT'S VERY SIMPLE
CRASH THE SYSTEM - don't play what so ever, pull your fiat go to physical and watch the algos die in a vaccum
IT'S VERY SIMPLE
If only the SEC had a pair of balls.
Well played, sir!
The SEC's focus is in the wrong direction.
Hammering the BD's that try to supply mom and pop with investments based upon risk tolerance.
Looking the other way when this type of casino shit happens.
SEC must is have balls - and dicks - why else to watch porn all day!?
Mebbe they're chicks?
They prefer midget martian tranny balls because they remind them so much of mommy.
They do but they are in the process of being emptied courtesy of Youporn.
SEC: There's a porn joke for that.
They do, but they use them to watch porn!
nevermind!
Smile You Son of a bitch!
Roy Schieder is that you?
Number 5 is alive!
LOL, I thought of that stupid Short Circuit movie too.
I'm thinking more Laughing Man from Ghost in the Shell-
http://hdwallpapers4free.com/wallpaper/laughing_man_ghost_shell_desktop_...
More appropos for it to be No.5 in the Prisoner.
Nobody will escape the algos when the SHTF.
"I'll be seeing you..." -- No. 6
Stop Loss orders are like antelope meat to a hungry algo lion... in either direction.
This is why I don't use stop loss orders. Getting stopped out at zero kind of defeats the purpose, doesn't it?
My odds would be much better in a casino!
And they serve free drinks while you're throwing away your money.
Nice Hoya Asahi spectacles.
But Terrence Duffy of CME said that HFT brings liquidity and that all at the CME is just fine. He was on television saying that so it has to be true.
The liquidity argument is so hilarious. Yeah it provides liquidity when the market needs it the least - in order to make faux volatility and allows high speed wash trading, and at the opportune time when you need liquidity, it locks up like me after inhaling a wasabi pea.
Clearly all that was needed to avoid this takedown was more HFT providing even more liquidity.
the fact there really isn't any public awareness or outcry about this crap implies a high level of comlpaceny and ignorance-the investigations will come way after the shit has hit the fan
It won't though -- a lot of Very Important people who sound Very Serious will use words like "unpredictable" and "unprecedented". The same language they used in 2008 will be used again in every single crisis, and people will just go with it.
The 'public' can barely figure the new lottery game du jour.
Those that can understand this are at a very low altitude on the bell curve.
"Those that can understand this are at a very low altitude on the bell curve."
Great way to put it - I'm going to use that line, if you don't mind. I'm happy to cite you as "as this guy on the internet 'toys for tits' put..."
I agree, it's a clever expression. GJ T4T!
Complacency? Ignorance?
You seem to operate under the assumption that Wall Street theft is not deliberate.
Or that they even care if you do see.
Is this like the HFT equivalent of "Look mom! Look what I can do! No hands!"?
No, it's more like "hay man hold my beer and watch this"!!!
Sad thing is 7 seconds is now "long term investing". Just curious, who was selling stocks to the dark pools at $0?
In economic news today, stocks rose again with the Dow reaching 15,000 after a brief 3 nanosecond drop to 12. Next up, cat migraines, the silent epidemic? We'll fill you in after the break.
...and this is why one can't be long (on margin) in the market.
And you can't short, because ever-increasing liquidity will kill off that idea very quickly.
Those guys who bought it at 1 cent are the luckyest bastards on the planet!!!!!!
Your trades would be cancelled.
We can't have small-bit players winning at this casino, now can we?
That was probably the algo too, which turned around a nano second later and sold it for two cents.
It's hard to find a carbon life form that is dumber than smart technology.
Shouldn't it say in the article that the stock dropped to "00"?
House wins...
One of the things George Bush II was pushing was letting people at least partially opt out of Social Security and invest in the stock market. Well, it looks like both of those choices can be turned into $0 now...
That's fucking awesome. I like it because as the gov't try to invent all this tek it's not like you can't make your own drone and blow someones fucking head off and lord knows what a creative mind could do with a 3D printer. It's a 2-way street assholes.
anyone have a program yet that follows every stock with buys at 19% below current price.......i believe 20% is the cutoff for no transaction
This is the "we can do anything we want" smiley face.
Now if only Qualys could invent an anti-algo security program, they would be worth $350 billion.
Good thing Dood-Frank is so focused on whether or not I make a small profit on a client trade. Why shoud HFT be on the radar? They are great for the mkt. All they do is provide liquidity ... our Govt regulators are worthless
A simple yet robust solution is to trade other markets where HFT's can not get access, such as most of Asia, MENA and S America . In many such markets charts and fundamentals still play a part, and your biggest worry will be reasonably easy to predict local market making syndicates who have similar market access to everyone else .
What we should do is require that trades be made on those "quaint" open outcry markets.
This is criminal.
When the "practice range" is outta balls the real tee-off in Round 1 will begin....IMMINENTLY....!!
Soon we will have 4-5 of these a day.......its the new normal.....remember when they used to look into them....now its OK......is there stop loss insurance....????
That's a classic Tyler.:-)
Tylers, your charts don't have microsecond time fractions?
So behind the times.
Why so serious?
I love investing!
Would the fall in share price breach some condition of the company's running line of credit, or possibly a loan? If so, it's probably just being tenderized in preparation for some vulture fund.
How do you insure against this?
Have a PUT with a Sell order that gets triggered at the bottom of the stock trough?
Nanosecond volatility! Nanosecond options BITCHES!
It's all part of derivative fun!
Fucked up man. At least bitcoin has more stability than stocks.
Bitches love smiley faces.
I'm an IBMer, math can do anything.....even take down a public company
i went to the net to check the chart for the day
https://www.google.com/finance?q=NASDAQ:QLYS
the horizontal on that chart begins at $10, and the tracking line went to that bottom, not to 0$. What am I missing?
does this mean that no transaction actually occurred below 10$ ?
I believe the market is trying to scare investors from putting in stop losses. This is twice now....I smell a market crash coming soon...